


















I 


0 


( 




t 







I 













































; 






















































































































































































- 


' 










. 
















63d Congress ) 
3d Session \ 


HOUSE OF REPRESENTATIVES 


Document 
No. 1620 


REPORT 

OF THE 


COMMITTEE TO INVESTIGATE 
THE COST OF AN ARMOR PLANT FOR 
THE UNITED STATES 


A PROVISION OF AN ACT MAKING APPROPRIATIONS 
FOR THE NAVAL SERVICE FOR THE FISCAL 
YEAR ENDING JUNE 30, 1915 



February 26, 1915.—Referred to the Committee on Naval Affairs 
and ordered to be printed 


WASHINGTON 

GOVERNMENT PRINTING OFFICE 
1915 







COMMITTEE TO INVESTIGATE THE COST OF AN ARMOR PLANT FOR 

THE UNITED STATES. 


Hon. BENJAMIN R. TILLMAN, United States Senate, Chairman. 
Hon. LEMUEL P. PADGETT, Member of Congress. 

Rear Admiral JOSEPH STRAUSS, United States Navy. 

2 


0. 0F 0, 

MAS 8 1S15 



{ 

i 

1 





As 

\a\S’ 

Co V^' 2> 

ARMOR PLANT FOR THE UNITED STATES. 


Washington, D. C., February 24, 1915. 

The committee appointed under the provisions of the act making 
appropriations for the Naval Service for the fiscal year ending June 
30, 1915, and for other purposes, approved June 30, 1914, begs to 
submit to Congress the following report, to wit: 

The law under which the committee acts is as follows: 

A committee is hereby appointed, to consist of the chairman of the Committee on 
Naval Affairs of the Senate and the chairman of the Committee on Naval Affairs.of 
the House of Representatives and one naval officer to be selected by the Secretary 
of the Navy, to investigate and report at the next regular session of Congress upon the 
cost of erection of an armor plant to enable the United States to manufacture its own 
armor plate and special treatment steel, capable of standing all ballistic and other 
necessary tests required for use in vessels of the Navy, at the lowest possible cost to 
the Government, taking into consideration all of the elements necessary for the eco¬ 
nomical and successful operation of such a plant. Said report shall contain the esti¬ 
mated cost of a plant and site sufficient to accommodate a plant having an annual 
output capacity of twenty thousand tons, and also a plant having an output of ten 
thousand tons, and also an itemized statement of the estimated cost of the necessary 
buildings, machinery, and accessories for each, and the estimated annual cost and 
maintenance of each, and the estimated cost of the finished product. 

Said committee is authorized to sit during the recess of Congress, to send for persons 
and papers, and to administer oaths. 

The sum of $5,000 is hereby appropriated, out of any money in the Treasury not 
otherwise appropriated, to pay the expenses of said committee, payable upon vouchers 
signed by the chairman of said committee. 

The committee subdivides its report into two parts, with two 
appendices, as follows: 

Part I.—Containing the estimates of cost of an armor plant and 
site sufficient to accommodate an armor plant having an annual out¬ 
put capacity of 20,000 tons, and also a plant having an output of 
10,000 tons per year, with itemized statement of estimated cost of 
the necessary buildings, machinery, and accessories for each. 

Part II.—Estimated cost of production of face-hardened armor 
made in the 20,000-ton plant when working at full capacity, and the 
estimated annual cost and maintenance of this plant; also the esti¬ 
mated cost of production of face-hardened armor made in the 10,000- 
ton plant when working at full capacity, and the estimated annual 
cost and maintenance of this plant. 

Appendix A.—Containing the hearings of the committee. 

Appendix B.—Containing the minutes of the committee. 


3 





. 

' 








































PART I 







PART I. 


In making the estimate of cost of an armor plant having a 20,000- 
ton capacity and of an armor plant having, a 10,000-ton capacity 
all available sources of information have been consulted, namely, 
the Bureau of Yards and Docks; many manufacturers of machine 
tools, cranes, gas producers, and cars; naval inspectors of ordnance 
stationed at the works of the various armor makers; engineers 
employed by steel makers; the files of the Navy Department, and 
previous congressional reports and investigations. 

It is not considered that these estimates are sufficiently accurate 
to enable the erection of such a plant to be proceeded with. It is 
thought that they are made with as great accuracy as was possible 
under the circumstances, and sufficiently so to enable Congress to 
make the first appropriation, should it be the will of Congress so to do, 
after its examination of this report. 

In these estimates the production of the special-treatment steel 
plating for the tops of turrets and conning towers, as would be neces¬ 
sary to keep pace with the production of thick armor, has been con¬ 
sidered, but the manufacture of all special-treatment steel required 
by the Navy each year on a similar basis has not been considered, 
for the reason that the committee finds that a plant for the produc¬ 
tion of special-treatment steel for protective deck plates and similar 
purposes will have an annual capacity 10 times as great as will be 
required. It is not possible to construct a rolling mill capable of 
rolling the size and quality of plate desired with a less annual output. 
If such a plant were erected, its entire organization and machinery 
would be idle for 47 weeks in the year. 

Owing to the lack of the necessary engineering and designing skill, 
it has not been possible to lay down this plant accurately, and to 
place in the various buildings the various pieces of machinery in 
exactly the same way that they would be installed, and therefore it 
is probable that many items would have to be added in the shape of 
machinery, tools, and general equipment which it is impossible to 
anticipate. 

Ten per cent has been added to the estimates for constructive work, 
buildings, and machinery, in order that any unforeseen contingencies 
would be covered; but even then, before proceeding with the erection 
of a plant a well-known consulting engineer, familiar with this class of 
work, and with the laying out of a factory, should be consulted, and 
carefully drawn plans and designs of all buildings and necessary 
machinery should be made before the construction could be pro¬ 
ceeded with. There are certain features in regard to the plan and 
detailed arrangements of such a plant which only engineers and 
metallurgists of high repute could pass upon. 

Estimates were first prepared for the 20,000-ton plant, and the 
10,000-ton plant estimate has been patterned therefrom. The price 

7 



8 


ARMOR PLATE FOR UNITED STATES. 


of the land necessary for the plant, and certain other items are so 
indefinite as to be only the roughest approximation. The location 
and local conditions will bear largely on the cost of the various build¬ 
ings and the installation of the machinery therein. The committee 
calls attention to the fact that the Government now owns, at the 
Philadelphia Navy Yard, ample land for the erection of an armor 
factory and therefore no land would have to be bought. Philadelphia 
is an ideal place for the erection of such a plant, as it is accessible 
both by deep-water transportation and railroad facilities, is near coal 
and iron, and has a fine labor market. However, the Navy Depart¬ 
ment itself will select the location and construct the plant if Congress 
orders one, and the committee only mentions that no expense for 
land will’ be necessary. Besides, the navy yard has facilities for 
assisting in the construction of this plant, which will largely reduce 
the expense of erecting it. 

The capacity of the 20,000-ton plant has been based upon com¬ 
pleting 20,000 tons of armor; that is to say, the armor for two battle¬ 
ships and the necessary ballistic, experimental, and shell-test plates 
usually required during the course of a year. 

No estimate for the manufacture of any special treatment steel is 
made, except that required for the turret and conning tower tops, as 
has been explained previously. 

For the production of 20,000 tons of finished armor plate per year 
about 70,000 tons of ingots would have to be cast, and as the open- 
hearth plant would be shut down on Sundays and holidays there 
could be no casting on Saturdays, owing to the fact that no stripping 
would be permissible on Sundays, and the plant would be able to 
average only 250 days per year, which means that 280 tons of armor 
ingots would have to be cast each day. 

Each open-hearth furnace would be out for repairs 8 weeks per 
year, or the 5 would have a total of 40 weeks of idleness. Thus we 
can reckon on an output of about 85 per cent of the total capacity 
of five furnaces. 

Considering the average weight of plate and the number of plates 
installed on each of the newest design of battleships, if this plant is 
to produce the armor for two battleships there will have to be pre¬ 
sented for forging, cementing, reforging, treatment, hardening, and 
bending two plates per day and there must be completed in the 
machine shop an average of five plates every three days. 

OFFICE BUILDING. 

The office building contemplated will be a two-story brick build¬ 
ing, fitted for offices on the lower floor, with a drafting room, blue¬ 
print room, and photographic room, with vaults for tracings and files, 
on the second floor. In this office would be the administrative and 
designing force of the plant. The equipment of the office building 
would consist of desks, chairs, stationery, typewriters, adding ma¬ 
chines, etc., necessary and proper for a completely equipped office 
building ready to commence work in a plant of this size. The esti¬ 
mate given for the equipment of this office building is necessarily 
very indefinite and has been made large in order to cover everything, 
including equipment for foremen's and leading men’s offices in the 
various buildings. 


ARMOR PLATE FOR UNITED STATES. 


9 


PHYSICAL AND CHEMICAL LABORATORY. 

This building will be a two-story brick building, fitted for physical 
laboratory on the lower floor, with chemical laboratory on the upper 
floor. The equipment will consist of the necessary instruments and 
material for tne conduct of the work at an armor plant of this size, 
including a complete microphotographic and examination equipment. 

TOOL HOUSE. 

This will be a one-story structural steel building, with corrugated- 
steel covering, for the purpose of housing wheelbarrows, shovels, 
picks, crowbars, and other tools used in the yard. 

BRICK SHED. 

This will be an open shed with a raised concrete platform; the 
frame to be of structural steel, the roof to be of galvanized steel. On 
the platform, under cover, will be stored refractory brick, large quan¬ 
tities of which will have to be kept in stock for the repairs of open- 
hearth and treatment furnaces. 

CARPENTER SHOP. 

This building will have a pitched roof, concrete floor, with steel 
floor beams; will be fireproofed; will be heated, lighted, and equipped 
with the necessary plumbing. It will have two stories, and the equip¬ 
ment will consist of workbenches, vises, wood lathes, planers, wood 
saws, joiners, band saws, molding machine, rip and crosscut saws, and 
sanding machine, with shafting, belting, and pulleys for driving the 
above. 

BLACKSMITH SHOP. 

This building will be one story high with an earth floor; pitched 
roof of galvanized steel. The equipment will consist of forges, anvils, 
and one automatic steam hammer, the idea of this shop being to 
dress the tools used in the machine shop and around the armor plant 
and to make minor repairs. 


STOREHOUSE. 

This building will be a two-story brick building with a pitched roof 
of galvanized steel; will have a concrete floor, steel floor beams; will be 
fireproofed; and its equipment will consist of shelves, counters, desks, 
and necessary arrangements for keeping complete account of all stock. 

LOCOMOTIVE HOUSE. 

This building will be sufficiently large for housing locomotives and 
steam cranes, and will be fitted lor making the necessary repairs to 
this rolling stock. 

ELECTRIC POWER PLANT. 

This plant will be contained in a brick building with structural 
steel frame and galvanized-iron roof and will have the necessary turbo¬ 
generators, piping, auxiliaries, switchboard, air compressors, etc. 


10 


ARMOR PLATE FOR UNITED STATES. 


BOILER PLANT. 

The boiler house will be a brick building with galvanized-steel roof, 
and will contain 20 boilers, with automatic stokers and necessary 
stacks. Over the boilers will be fitted reinforced concrete coal bunk¬ 
ers and underground will be the necessary ash-handling machinery. 

OPEN-HEARTH PLANT. 

In the open-hearth plant will be made all of the steel from which the 
armor is to be fabricated. The raw material used will be pig iron and 
scrap, with the necessary nickel, ferrochrome, ferromanganese, etc., 
required. The building will be one story, with a monitor in its cen¬ 
ter, the frame of the building to be of structural steel, which will be 
covered with galvanized steel. It will be fitted with crane runways, 
and will be constructed on such levels as to best accommodate the 
5 open-hearth furnaces and the 10 accompanying gas producers. The 
charging floor in front of the open-hearth furnaces will be laid with 
tracks for two electric charging machines and for the necessary charg¬ 
ing bogies. In the rear of the furnaces, at a lower level, wifi be two 
casting pits in which the ingots will be cast. Estimates have been 
made for a heavy crane capable of handling the largest ingots and 
ladles used in connection with pouring the ingots. 

No estimate has been made for the making of sand molds, as it is 
contemplated that only metal molds will be used, and they will be 
purchased from some manufacturer of high-grade castings, rather 
than manufactured in the plant. Estimates have been made for the 
necessary gas mains and coal and ash handling machinery in con¬ 
nection with the gas producers, these producers to be located in a 
lean-to attached to the building. 

FORGING AND BENDING SHOP. 

The building will be a flat roof with monitor, fitted with the neces¬ 
sary crane runways. In this building will be located three 14,000-ton 
capacity presses capable of forging and bending the thickest and 
heaviest armor known or required. 

In the armor plants of domestic manufacturers the forging and 
bending presses have heretofore been of the hydraulic type, the use of 
which type necessitates a very high-powered pumping engine. After 
consultation with the manufacturers of the steam intensifier type of 
forging press, the committee is informed by them that it is entirely 
practicable to use this type of press for the forging and bending of 
armor, and they state that such presses are used abroad, but none 
of them have been used in this country, and if it is found that they can 
be used satisfactorily they will be cheaper than the hydraulic press. 
This estimate contemplates the use of the steam intensifier type of 
press. Should the Government decide to build an armor plant, this 
matter should be one for the most careful investigation by the engineers 
employed for the design and layout of the plant, and should it be 
decided that it would be safer to follow the design of presses used in 
existing armor plants in this country, these estimates would have 
to be increased by about $750,000 "for the 20,000-ton plant and 
$500,000 for the 10,000-ton plant. 


ARMOR PLATE FOR UNITED STATES. 


11 


This shop will also contain ingot-heating and car-bottom plate¬ 
heating furnaces for the heating of ingots and plates preparatory to 
forging, reforging, and bending. The gas producers required for 
these furnaces will be located in a lean-to oh the cementing and 
tempering shop. 

A very large number of dies and tools are required in this shop, 
which could not be given in the form of an itemized list in the 
estimate, but are lumped into one general item. 

CEMENTING AND TEMPERING SHOP. 

This shop will be a one-story, flat-roof, and monitor building, 
structural-steel frame covered with galvanized steel, in which the 
armor plate will be carbonized and heat treated, and finally water 
hardened. It will contain a large number of car-bottom plate¬ 
heating furnaces and water-hardening sprays, piping, and reser¬ 
voirs, required for tempering. In a lean-to will be located the neces¬ 
sary gas producers for this shop and for the forging and bending shop. 
Estimates are made for the gas mains and coal and ash handling 
machinery for the gas producers. The location of the pumps to 
supply hydraulic pressure throughout the plant is contemplated as 
being in this building. This hydraulic pressure will be required for 
the withdrawal of car bottoms from furnaces, for the opening of the 
various furnace doors, operation of valves, etc. 

MACHINE SHOP. 

The machine shop will be a brick building, one story, flat roof, with 
the necessary crane runways. This building will be built in two 
spans and will be heated and well lighted, in order that machine-tool 
work may be done in comfort at all times. The shop will contain the 
machine tools for finishing armor plate, and will oe supplied with 
cranes for its handling. There will also be the necessary surface 
plates for the erection of the armor before it leaves the shop. The 
estimate for this equipment was more accurately and readily pre¬ 
pared than for any other part of the plant, as the makers of the tools 
were consulted and actual estimates obtained. 


' 






















PART II 






13 























PART II. 


The estimated cost of face-hardened armor made in the 20,000- 
ton and the 10,000-ton plants, when working at full capacity, is made 
up as follows: 

(a) An estimate has been made of the probable number of em¬ 
ployees required for plants of these sizes, with their daily or annual 
rates of pay. The national holidays, summer half holidays, and 15 
days’ annual leave, due to each Government employee, have been 
considered. With this in view the total annual pay roll has been 
computed, which has been divided between 20,000 tons and 10,000 
tons of armor, which are to be the respective productions of the 
plants, giving the cost of labor per ton of armor in such plants. In 
this cost of labor per ton of armor is included the labor of repair and 
maintenance, as the men who perform this work are included in the 
annual pay roll of the plants. 

( b ) The rates of pay have been obtained by ascertaining what men 
of similar rating receive at similar plants and by consulting the wage 
schedule of the navy yard, Washington. 

(c) The metal per ton of plate has been obtained by taking the 
standard practice for making up a charge of nickel-chrome alloy and 
charging the price per ton which prevailed during 1913 for the 
material. The cost of metal per ton is the same for both plants. 
The furnace losses, pit scrap, rejected ingots, have been obtained 
from actual practice. The amount of finished plate produced from 
ingots at the forge has been obtained by actually ascertaining the 
respective weights of ingots at forge presented by one company and 
comparing it to the number of finished plates produced by that 
same company. In obtaining the cost of the metal in a ton of plate 
credit for pit scrap and nickel scrap plates and ingots has been given 
at the same rate at which this material is charged into the furnace 
charge, the labor necessary for cutting this material up being already 
included in the pay roll. 

(d) The maintenance and repairs per ton of armor has been 
obtained by estimate and is thought to be fairly accurate. The 
price of the coal used is the contract price for coal for the Navy 
for 1915. The other estimates have been obtained by observation 
and investigation. The 2 per cent of installation cost for upkeep 
of plant and buildings is for the extensive overhauls of furnaces 
and upkeep of the buildings and materials necessary to keep the 
plant in first-class condition, other than those small repairs which 
are necessary to keep in a going condition. This percentage is less 
than has ever been used in previous estimates, but is thought to be 
sufficient. 

( e ) By adding the four parts mentioned previously the total cost 
per ton of armor has been obtained, which is the production cost 
only. No allowance is made for depreciation, fire losses, or Navy 
Department administration. 


15 



16 


ARMOR PLATE FOR UNITED STATES. 


The following estimates for armor made in the 20,000-ton arid the 
10,000-ton plants, respectively, are made on the assumption that 
the Government will require sufficient armor each year to keep 
these plants going at their full capacities. Should these plants not 
be kept going at full annual capacity, the cost of the armor produced 
would be increased, and should there not be in any one year occasion 
for the manufacture of any armor the cost of maintenance for this 
year would have to be distributed over the production cost for sev¬ 
eral years, thus increasing the average cost of the armor produced 
in the plants. 

Just how much this increase in cost of armor would be, due to the 
fact that the plant is not working at full capacity, can not be fore¬ 
told, but it would vary, due to the specific circumstances under 
which the plant might be operated for that year. 


Summary of 'probable cost of armor in a 20,000-ton Government armor plant when operating 

at full capacity. 



Component. 

Amount 
per ton. 

'Exhibit A . 

Labor per ton (pav roll). 

$71.9? 
107.14 
40. 72 
10.33 

Exhibit R 

Metal per ton . . 

Exhibit C. 

Repairs and maintenance (a). 


Maintenance of plant (b) . 

Total. 

230.11 



Summary of probable cost of armor in a 10,000-ton Government armor plant when operating 

at full capacity. 



Component. 

Amount 
per ton. 

Exhibit A. 

Labor per ton (pay roll). 

$87.38 
107.14 
55.00 
13.27 

Exhibit B. 

Metal per ton. 

Exhibit C. 

Repairs and maintenance (a) . 


Maintenance of plant ( b ). 

Total. 

262. 79 



Exhibit A. 

Pay roll summai'y of 20,000-ton armor plant. 


Em¬ 

ploy¬ 

ees. 

Location. 

Daily. 

Annual. 

8 

General offices. 


$47,500.00 

27 

Main office. 

$84 88 

10 

Pay and time office. 

37. 60 


10 

Laboratory. 

31. 76 


3 

Dispensary. 

7.20 


16 

Blacksmith shop. 

58.00 


24 

Carpenter shop ‘. 

90.32 


80 

Power plant. ". 

229.80 


46 

Locomotive house. 

125. 84 


13 

Storehouse.. 

36.88 


105 

Miscellaneous and yard... 

306.32 


257 

Open hearth. 

693 89 


277 

Forge and bending shop. 

816.64 


280 

Cementing and tempering shop. 

725.63 


372 

Machine shop. 

1 127 42 


1,528 

Total. 

4,372.18 

1 368 492 34 














































































ARMOR PLATE FOR UNITED STATES. 


17 


Sundays: 

Power plant.$172.35 

Open hearth. 231.39 


403.74 times 52. $20,989.80 

Holidays: 50 per cent, $403.74 equals $201.82 times 7. 1,412.74 


Total. 1,438,394.88 

Pay roll per ton. 71.02 


Pay roll summary of 10,000-ton armor plant. 


Em¬ 

ploy¬ 

ees. 

Location. 

Daily. 

Annual. 

8 

General offices. 


$47,500.00. 

16 

Main office. 

$52.12 
18.80 

5 

Pay and time office. 


7 

Laboratory. 

28.80 


3 

Dispensary. 

7.20 


9 

Blacksmith shop. 

32.40 


14 

Carpenter shop. 

52.88 


50 

Power plant. 

144.52 


27 

Locomotive house. 

74.72 


7 

Storehouse. 

20.32 


65 

Miscellaneous and yard. 

185.84 


162 

Open hearth. 

446.19 


161 

Forge and bending shop. 

488.76 


156 

Cementing and tempering shop. 

413.00 


206 

Machine shop. 

629.36 




896 

Total. 

2,594.91 

812,206.83 



Sundays and holidays.... $14,107.51 

Total. 873,814.34 

Pay roll per ton. 87.38 


PROBABLE PAY ROLL FOR 20,000-TON AND 10,000-TON ARMOR PLANTS. 


The wages per day are based on the wages now in force at similar 
plants and at the Naval Gun Factory. 

The number of per diem employees is based on three eight-hour 
shifts, Sundays and holidays excluded. The pay table shows the 
total number, but does not divide them into shifts. Employees work 
284 days a year, but are paid for 313 days. It is estimated that 145 
employees would work on Sundays in the 20,000-ton plant and 94 
in the 10,000-ton plant, as the power plant must be in operation, and 
one shift in the open hearth must be coming on at 4 p. m. to start a 
melt for tapping on Monday. 


General offices: Salary. 

General superintendent.$15,000 

Open-hearth superintendent. 6, 000 

Forging-plant superintendent. 5, 000 

Armor-treatment superintendent. 5, 000 

Machine-shop superintendent. 4, 000 

Chief engineer of plant. 4, 000 

Metallurgist. 6,000 

Chemist.-. % 500 


Total. 47.500 

83344—H. Doc. 1620, 63-3-2 



















































18 


ARMOR PLATE FOR UNITED STATES 


'Number, 

20,000- 

ton 

plant. 

Number, 

10,000- 

ton 

plant. 

Position. 

Daily 

wages. 

Total 

daily 

waves, 

20,000- 

ton 

plant. 

Total 

daily 

waves, 

10,000- 

ton 

plant. 



MAIN OFFICE. 




1 

1 

Chief clerk. 

$5.04 

$5.04 

$5.04 

5 

3 

Stenographers. 

3.28 

16.40 

9.84 

6 

3 

Clerks. 

3. 72 

22.32 

11.16 

6 

3 

Messengers. 

1.76 

10. 56 

5.28 

1 

1 

Janitor. 

2.00 

2.00 

2.00 

2 

1 

Assistant janitors. 

1.76 

3. 52 

1.76 

1 

1 

Draftsman. 

5.04 

5.04 

5.04 

5 

3 

Draftsmen. 

4.00 

20.00 

12.00 

27 

16 



84.88 

52.12 



PAY AND TIME OFFICE. 




10 

5 

Clerks. 

3.76 

37.60 

18.80 



LABORATORY. 




4 

3 

Assistant chemists. 

4.40 

17.60 

13.20 

2 

1 

Assistant metallurgists.1. 

5.04 

10.08 

5.04 

2 

2 

Testing-machine men. 

3.52 

7.04 

7.04 

2 

1 

Clerks. 

3.52 

7.04 

3.52 

10 

7 



31.76 

28.80 



DISPENSARY. 




3 

3 

Dispensary attendants. 

2.40 

7.20 

7.20 



BLACKSMITH SHOP. 




3 

1 

Hammermen. 

3.60 

10.80 

3.60 

1 

1 

Heater. 

3. 20 

3. 20 

3.20 

5 

3 

Tool dressers. 

3. 60 

18.00 

10.80 

2 

1 

Tool temperers. 

4.00 

8. 00 

4.00 

5 

3 

Blacksmiths. 

3.60 

18.00 

10.80 

16 

9 



58.00 

32. 40 








CARPENTER SHOP. 




1 

1 

Chief carpenter. 

5. 04 

5.04 

5.04 

4 

2 

Pattern makers. 

4.00 

16. 00 

8.00 

12 

6 

Carpenters. 

3. 76 

45.12 

22. 56 

6 

4 

Painters. 

3. 44 

20. 64 

13. 76 

1 

1 

Clerk. 

3. 52 

3. 52 

3.52 

24 

14 



90. 32 

52.88 









POWER PLANT. 




3 

3 

Foremen. 

5. 04 

15. 12 

15.12 

15 

9 

Water tenders. 

3. 28 

49. 20 

29. 52 

15 

9 

Firemen. 

2.12 

31.80 

19. 08 

12 

8 

Laborers. 

1. 76 

21. 12 

14.08 

3 

3 

Oilers. 

2.80 

8. 40 

8. 40 

20 

12 

Repair gang. 

3.12 

62. 40 

37. 44 

6 

3 

Engineers for generators. 

3. 28 

19. 68 

9.84 

6 

3 

Electricians for generators. 

3. 68 

22. 08 

11.04 

80 

50 



229. 80 

144.52 









LOCOMOTIVE nOUSE. 




2 

1 

Cranemen. 

2.80 

5.60 

2.80 

6 

4 

Engine drivers. 

3. 04 

18. 24 

12. 16 

6 

4 

Firemen and helpers. 

2. 72 

16. 32 

10. 88 

6 

4 

Mot or men. 

2. 72 

16. 32 

10. 88 

4 

2 

Locomotive crane drivers. 

3.04 

12.16 

6. 08 

12 

6 

Locomotive crane drivers. 

2.00 

24.00 

12.00 

5 

3 

Repair gang. 

3. 52 

17. 60 

10. 56 

5 

3 

Repair gang. 

3.12 

15. 60 

9. 36 

46 

27 



125. 84 

74. 72 









STOREHOUSE. 




7 

4 

Clerks. 

3. 76 

26. 32 

15. 04 

6 

3 

Laborers. 

1.76 

10.56 

5. 28 

13 

7 



36. 88 

20. 32 

























































































































ARMOR PLATE FOR UNITED STATES 


19 


Number, 

20,000- 

ton 

plant. 

Number, 

10,000- 

ton 

plant. 

Position. 

Daily 

wages. 

Total 

daily 

wages, 

20,000- 

ton 

plant. 

Total 

daily 

wages, 

10,000- 

ton 

plant. 



MISCELLANEOUS (YARD). 




10 

5 

Bricklayers. 

14. 72 

[547. 20 

523.60 

2 

1 

Tool-house keepers. 

2.00 

4.00 

2.00 

12 

7 

Track laborers. 

2.00 

24.00 

14.00 

20 

12 

Laborers. 

1. 76 

35.20 

21.12 

3 

3 

Gang bosses. 

2. 72 

8.16 

8.16 

8 

4 

Steamfitters. 

3.60 

28.80 

14.40 

12 

7 

Electricians. 

3.44 

41. 28 

24.08 

12 

7 

Armature winders. 

3.52 

42. 24 

24.64 

3 

3 

Lamp men. 

2. 72 

8. 16 

8.16 

2 

2 

Storekeepers. 

2. 56 

5.12 

5.12 

6 

3 

Wiremeri. 

3. 44 

20.64 

10. 32 

12 

9 

Watchmen. 

2. 56 

30. 72 

23.04 

3 

2 

Pipe fitters. 

3. 20 

10.80 

7.20 

105 

65 



306. 32 

185. 84 



OPEN-HEARTH SHOP. 




1 

1 

Foreman. 

8. 32 

8.32 

8. 32 

3 

3 

Foremen (sub). 

6. 32 

18. 96 

18.96 

15 

9 

Molders. 

3.60 

54.00 

32. 40 

45 

27 

Firemen (producers). 

2. 40 

108. 00 

64.80 

3 

3 

Melters. 

6.00 

18.00 

18.00 

3 

3 

Melters (helpers). 

3.04 

9. 12 

9. 12 

6 

3 

Charging-machine tenders. 

3.04 

18. 24 

9.12 

45 

25 

Pitmen.. 

2. 48 

111.60 

62.00 

60 

40 

Floor men.. 

2.00 

120. 00 

80.00 

12 

8 

Cranemen. 

2.80 

33.60 

22. 40 

6 

3 

Scrap-vard laborers. 

2.00 

12.00 

6. 00 

1 

1 

Scrap-yard boss. 

2. 72 

2. 72 

2. 72 

5 

3 

Clerks. 

2. 52 

12. 60 

7. 56 

1 

1 

Messenger. 

1.76 

1.76 

1.76 

3 

3 

Oilers. 

2.80 

8.40 

8.40 

3 

2 

Electricians. 

3.44 

10. 32 

6. 88 

45 

27 

Repair gang (furnaces). 

3.25 

146. 25 

87. 75 

257 

162 



693. 89 

446.19 







FORGING AND RENDING SHOP. 




1 

1 

F oreman.. 

8.32 

8.32 

8.32 

6 

4 

Foremen (press). 

6.32 

37. 92 

25. 28 

36 

24 

Levermen. 

4.00 

144.00 

96.00 

15 

8 

Chippers. 

2.48 

37. 20 

19.84 

30 

15 

Floormen. 

2.00 

60.00 

30.00 

18 

15 

l ranemen. 

2. 80 

50.40 

42.00 

45 

25 

Heaters. 

2.80 

126.00 

70.00 

6 

3 

Pump engineers. 

3. 52 

21.12 

10. 55 

12 

6 

Pump engineer helpers. 

2.72 

32.64 

16.32 

40 

20 

Producer firemen. 

2.40 

96.00 

48. 00 

3 

3 

Floor bosses. 

4.00 

12.00 

12. 00 

12 

6 

Pyrometer tenders. 

2. 24 

26.88 

13.44 

15 

8 

Scalers. 

2.48 

37. 20 

19. 84 

3 

3 

Boss heaters. 

4.00 

12.00 

12.00 

2 

2 

Clerks. 

2. 52 

5. 01 

5. 04 

24 

12 

Repair gang. 

3.25 

78. 00 

39.00 

6 

3 

Steamfitters. 

3. 60 

21.60 

10.80 

3 

3 

Electricians. 

3.44 

10.32 

10. 32 

977 

161 



816.64 

488. 76 

6 i / 







CEMENTING AND TEMPERING SHOP. 




i 

1 

Foreman. . 

8.32 

8.32 

8. 32 

42 

21 

Scalers. 

2. 48 

104.16 

52.08 

30 

15 

Floormen. 

2.00 

60.00 

30.00 

15 

8 

Pyrometric instrument tenders. 

2. 24 

33.60 

17.92 

2 

2 

Clerks. 

2.52 

5. 04 

5. 04 

15 

8 

Repair gang. 

3. 25 

48. 75 

26.00 

3 

2 

Electricians. 

3. 44 

10.32 

6. 88 

3 

3 

Boss heaters. 

4.00 

12. 00 

12. 00 

36 

18 

Cementing heaters. 

2. 80 

100.80 

50. 40 

15 

8 

Tempering heaters. 

2. 80 

42. 00 

22.40 

3 

3 

Floor bosses. 

4.00 

12. 00 

12.00 

75 

39 

Producer firemen. 

2.40 

180. 00 

93.60 

12 

9 

Cranemen. 

2.80 

33.60 

25.20 

3 

2 

Engineers. 

3.52 

10.56 

7.04 

6 

3 

Helpers. 

2.72 

16.32 

8.16 

2 

2 

Messengers. 

1.76 

3.52 

3.52 






































































































20 


ARMOR PLATE FOR UNITED STATES 


Number. 

20,000- 

ton 

plant. 

Number, 

10,000- 

ton 

plant. 

Position. 

Daily 

wages. 

Total 

daily 

wages, 

20,000- 

ton 

plant. 

Total 

daily 

wages, 

10,000- 

ton 

plant. 



CEMENTING AND TEMPERING SHOP—Continued. 




2 

1 

Sprayers. 

$2.52 

$.5.04 

$2.52 

3 

2 

Sand blast men. 

2.24 

6.72 

4. 48 

6 

3 

Oxvhydric tenders. 

2. 48 

14. 88 

7.44 

3 

3 

Engineers (oxyhydric). 

3.28 

9. 84 

9.84 

3 

3 

Helpers (oxyhydric). 

2.72 

8.16 

8.16 

280 

156 



725. 63 

413. 00 









MACHINE SHOP. 




1 

1 

Foreman. 

8. 32 

8. 32 

8.32 

3 

3 

Subforemen. 

6.32 

18. 96 

18.96 

18 

12 

Cranemen. 

2.80 

50.40 

33. 60 

25 

15 

Riggers. 

3. 20 

80.00 

48.00 

150 

75 

Machinists. 

3.68 

552. 00 

276. 00 

99 

50 

Machinists’ helpers. 

2.00 

198.00 

100. 00 

24 

15 

Machinists, tool room. 

3.68 

888.32 

55. 20 

24 

15 

Grinders and chippers. 

2. 48 

59.52 

37.20 

1 

1 

Shop inspector. 

6.32 

6.32 

6.32 

12 

8 

Inspectors ’ gang. 

2.24 

26.88 

17.92 

6 

4 

Electricians. 

3.44 

20.64 

13. 76 

6 

4 

Tool-room tenders. 

2.00 

12.00 

8.00 

1 

1 

Clerk. 

3.04 

3. 04 

3. 04 

2 

2 

Messengers. 

1.52 

3.04 

3. 04 

372 

206 



1,127.44 

629.36 







Exhibit B. — Metal per ton of armor. 


Charge. 

Unit 

price. 

Tons. 

Total 

value. 

Bessemer pig. 

$17.50 

23.84 

$417.20 
2,953.02 
2.63 

Nickel scrap. 

42.00 

70.31 

Ore.. 

9.75 

.27 

Cinder and scale__ 

6.11 

. 19 

1.16 

Ferrochrome.. 


119.76 

2.30 

275. 45 

Metallic nickel. 

784.00 

1.87 

1,466.08 
9.03 
13.60 
44.54 

Ferrosilicon. 

43.00 

.21 

Spiegeleisen. 

34.00 

.40 

Ferromanganese__ 

73.02 

.61 



Total.. 



100.00 

5,182. 71 

5.30 
8.92 
77.38 

Flux: 

Limestone. 

4. 65 

1.14 

Fluorspar. 

1.00 

8.92 

106.00 

A. M. S. metal. 

.73 



Total material, 100 tons metal charged. $5 274.31 

Per ton. 52.74 

, Tons. 

Metal charged. 100.00 

Furnace loss, 7 per cent. 7 . oo 


Metal poured. 93.00 

Pit scrap, 5 per cent. ’’’’ 4 55 


Ingots in pit.. . 88 . 35 

Rejected mgots, 5 per cent. 4.42 


Ingots at forge (30 per cent of which are produced in form of finished plate, according to data ob¬ 
tained). 83.93 

Scrap (scale and oxid loss, 2.5 tons).56.25 

Finished plate. . .. 25 18 


Recovered, 4.65 tons pit scrap, at $6.11. $28 41 

4.42 tons rejection, at $42. 2 548 14 

56.25 tons scrap, at $42." ’' [ ’ 


Total credit 


2,576.-55 


Total metal 
Credit. 


5,274.31 
2,576.55 


25.18 tons plate. 

Metal in ton of plate 


2,697.76 

107.14 





























































































ARMOR PLATE FOR UNITED STATES. 


21 


Exhibit C. 

Repairs and maintenance of 20,000-ton plant. 


(a) Coal, 100,000 tons, at $2.80.$280,000. 00 

Tools, lubricants.. 210, 000. 00 

Ingot molds and materials for repairs other than below. 174, 500. 00 

Repairs to equipment press house, machine shop, cementing shop, 

materials only. 100,000.00 

Yard, laboratory, offices, materials. 50, 000. 00 


20,000 tons. 814, 500. 00 

Per ton. 40. 72 

Upkeep of plant and buildings, and extensive overhaul repairs of 
furnaces and machinery, 2 per cent of installation cost, $10,331,907. 206, 638. 00 

20,000 tons, per ton. 10. 33 


Total annual cost of maintenance and repairs, 20,000-ton 
plant. 1,021,138.00 


Repairs and maintenance of 10,000-ton plant. 


(a) Coal, 70,000 tons, at $2.80.$196.000. 00 

Tools, lubricants. 140, 000. 00 

Ingot molds and materials for repairs other than below.. 116, 000. 00 

Repairs to equipment press house, machine shop, cementing shop, 

materials only. 65, 000. 00 

Yard, laboratory, offices, materials... 35, 000. 00 


10,000 tons. 552, 000. 00 

Per ton. 55. 00 

(6) Upkeep of plant and buildings, and extensive overhaul repairs of 

furnaces and machinery, 2 per cent of installation cost, $6,635,107. 132, 702. 00 

10,000 tons, per ton. 13. 27 


Total annual cost of maintenance and repairs, 10,000-ton 
plant. 684, 702. 00 


The committee invites attention to the great difficulty of making 
a close estimate of the cost of manufacturing armor, in the absence 
of experience in such manufacture. The committee has been unable 
to procure from those engaged in the manufacture of armor any 
definite information to aid them in arriving at its cost. The above 
report, therefore, is made as a result of investigation by the com¬ 
mittee in person, aided by the inspectors at the armor plants and 
the officers charged with the cognizance of armor in the Navy Depart¬ 
ment and from all other sources of information obtainable. 

Respectfully submitted. 

B. R. Tillman, 

Chairman Senate Committee on Naval Affairs. 

L. P. Padgett, 

Chairman Committee on Naval Affairs, House of Representatives . 

Joseph Strauss, 

Chief of Bureau of Ordnance . 
























APPENDIX A 


HEARINGS BEFORE A SPECIAL COMMITTEE OF THE CONGRESS 
OF THE UNITED STATES, SIXTY-THIRD CONGRESS, THIRD SES¬ 
SION, PURSUANT TO A PROVISION OF THE NAVAL APPRO¬ 
PRIATION ACT FOR THE FISCAL YEAR ENDING 
JUNE 30, 1915, AND FOR OTHER PURPOSES 
APPROVED JUNE 30, 1914 


23 










PREFACE. 


The committee submitted a series of prepared questions to those 
officials of the various companies who were in a position to know 
the correct answers, and the questions submitted and the replies 
elucidated are herewith given. It will be seen from these replies 
that in general, no information could be had from the armor-plate 
manufacturers which would tend to throw any light on the cost of 
their product. Where answers were refused the refusal was generally 
based on the plea that the answer would disclose business secrets 
which would be advantageous to their rivals at home and abroad. 
The committee does not believe that a frank disclosure of the costs 
would work any harm to any of the firms, so far as furnishing an 
advantage to their rivals is concerned. 

24 



ARMOR PLANT FOR THE UNITED STATES. 


TUESDAY, NOVEMBER 24, 1914. 

Special Committee, 

Pittsburgh, Pa. 

The committee met at 9.40 a. m., at the office of the Carnegie 
Steel Co., Hon. B. R. Tillman (chairman) presiding. 

Present: Hon. L. P. Padgett, Member Congress, Rear Admiral 
J. Strauss, United States Navy, members of the committee; Lieut. 
Commander C. C. Bloch, United States Navy; Mr. J. B. Knight, and 
Mr. E. S. Theall, assistants to the committee. 

There were also present Mr. A. C. Dinkey, president of the Carnegie 
Steel Co.; Mr. James J. Campbell, Mr. R. H. Watson, Mr. L. R. 
Custer, and other officials of the Carnegie Steel Co. 

STATEMENT OF MR. A. C. DINKEY, PRESIDENT OF THE 
CARNEGIE STEEL CO. 

Mr. A. C. Dinkey, having been duly sworn, testified as follows: 

The Chairman. What is your name and occupation ? 

Mr. Dinkey. A. C. Dinkey, president of the Carnegie Steel Co. 
The Chairman. Have any newspaper men outside wanted to get in 
here? 

Mr. Dinkey. No, sir. 

The Chairman. Haven’t shown any inclination or desire to get in? 
Mr. Dinkey. No, sir. 

The Chairman. If they apply, I wish you would give orders that 
they be admitted, for we want the hearing to be public. 

Mr. Dinkey. Yes, sir; I will give that order right away. 

(Mr. Dinkey left the room for a moment, and upon his return said: 
“That is arranged for. If anybody comes here at all, they will be 
shown in.”) 

The Chairman. We have prepared a list of questions before we left 
Washington, and I have asked Admiral Strauss to act for the commit¬ 
tee in propounding these questions for the committee. 

Q. How much does it cost your company, f. o. b., to produce a ton 
of K. C. armor, class A-l ? That is, material, labor, and shop over¬ 
head charges. 


25 



26 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Dinkey. I think it would be greatly against the interest of the 
Carnegie Steel Co., both as regards the armor makers abroad and in 
this country, to expose in a public record our costs. 

The Chairman. Would you be willing to keep the question under 
advisement and answer it in writing later ? 

Mr. Dinkey. The idea that I had in mind was that even if you 
asked me to put the answer in writing I would have difficulty with it, 
if the answer was to be a part of a public record. 

The Chairman. We are obliged to make a report to Congress of 
what we find, and therefore, if you want to guard any secrets you 
had better not tell us any secrets, either in writing or orally. 

Mr. Dinkey. That was the idea I was trying to convey, that even 
in writing we would have difficulty with the answer if it were a part 
of a public record. 

Q. In calculating costs do you take the annual output of a single 
year or of a term of years, and do you make any allowance for rejec¬ 
tions and ballistic failures?—A. Our regular cost system is based 
on a calendar year’s work, and of course it includes all expenses. 

Q. What are the various components of this cost per ton?—A. I 
would like to record the answer to this question to be in harmony 
with my answer to the first question as to costs. 

The Chairman. Mr. Dinkey understands, of course, that the ste¬ 
nographer will furnish him a copy of this hearing before it is made pub¬ 
lic and given to Congress, so that he will have the opportunity to 
amend his answers or make any corrections that he sees fit. 

Mr. Dinkey. Yes, because I do not have facility in framing my 
answers in very good English, and I would appreciate the opportunity 
of looking them over. 

Q. What is the cost per ton of the armor ingot at the forge, includ¬ 
ing all rejections?—A. That is a part of the original question as to 
costs. 

Q. Give the components, with their unit prices, that enter into a 
furnace charge for an armor heat.—A. I do not think it proper to 
answer this for the reasons set forth in answer to the first question as 
to costs. 

Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat ?—A. I do not think it proper to answer 
this, for the reasons set forth in answer to the first question as to 
costs. 

Q. How much does this amount to per ton of armor ingot pro¬ 
duced?—A. I do not think it proper to answer this for the reasons 
set forth in answer to the first question as to costs. 

Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot ?—A. I do not think it proper to an¬ 
swer this for the reasons set forth in answer to the first question as 
to costs. 

Q. What is the fuel charge for each ton of ingot ?—A. I do not think 
it proper to answer this for the reasons set forth in answer to the first 
question as to costs. 

Q. What is the proportional laboratory superintendence charge for 
each ton of ingot ?—A. I do not think it proper to answer this for the 
reasons set forth in answer to the first question as to costs. 


ARMOR PLANT FOR THE UNITED STATES. 


27 


Q. What is the lifting, stripping, and chipping charge per ton of 
ingot ?—A. I do not think it proper to answer this for the reasons set 
forth in answer to the first question as to costs. 

Q. What is the power charge, including steam, electric, and water, 
for each ton of ingot ?—A. I do not think it proper to answer this for 
the reasons set forth in answer to the first question as to costs. 

Q. What is the cost of forging ?—A. I do not think it proper to 
answer this for the reasons set forth in answer to the first question as 
to costs. 

Q. What scrap allowance is made for condemned ingots ?—A. I do 
not think it proper to answer this for the reasons set forth in answer 
to the first question as to costs. 

Q. How many tons of armor ingots did your company manufac¬ 
ture last year ?—A. Eighteen thousand eight hundred and thirty-one 
gross tons. 

Q. What was the total number of these ingots in tonnage which 
were rejected before reaching the forge?—A. Five hundred and 
twenty-four gross tons. 

Q. How many tons of ingots were forged during the past year ?— 
A. Eighteen thousand three hundred and seven gross tons. 

Q. How many tons of ingots were rejected during the forging?— 
A. None. 

Q. What scrap allowance was made for those rejected during 
forging?—A. None rejected. 

Q. What was the oxidization and scale loss at the forge ? 

The Chairman. I do not have any idea that you have kept any 
record. 

Mr. Dinkey. We do not take weights before and after forging. 

Q. What did the labor for forging each ton of ingot amount to ?— 
A. I do not think it proper to answer this for the reasons set forth 
in answer to the first question as to costs. 

Q. What did the fuel for each ton of ingot forged amount to ?—A. 
I do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. What did the repairs to heating furnaces amount to for each 
ton of armor?—A. I do not think it proper to answer this for the 
reasons set forth in answer to the first question as to costs. 

Q. What did the electric power, light, steam, water, drafting, trans¬ 
portation, and inspection per ton of plate amount to during the forg¬ 
ing ?— x. I do not think it proper to answer this for the reasons set 
forth in answer to the first question as to costs. 

Q. Of all the ingots forged and not rejected, what percentage was 
discarded? That is, how many tons?—A. Four thousand seven 
hundred and forty-six gross tons. 

The Chairman. Admiral, right here I think we ought to have it 
from the beginning. 

Admiral Strauss. We do, sir. That is all embodied in the ques- 
tions. 

Q. What allowance was made for the metal thus discarded ?—A. 
I do not think it proper to answer this for the reasons set forth 
in answer to the first question as to costs. 


28 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What is the unit price per ton of plate when ready for carbon¬ 
izing?—A. I do not think it proper to answer this for the reasons 
set forth in answer to the first question as to costs. 

Q. How many tons of armor plate were carbonized at the works 
of your company last year ?—A. Thirteen thousand five hundred and 
sixty-one gross tons. 

Q. What was the oxidization and scale in this treatment, in tons ?— 
A. There are no weights taken before and after carbonizing. 

Q. What was the total number of plates rejected during carbon¬ 
ization?—A. None. 

Q. What does the labor per ton of carbonized plate amount to ?—- 
A. I do not think it proper to answer this for the reasons set forth in 
answer to the first-question as to costs. 

Q. What does the material per ton of carbonized plate amount 
to?—A. I do not think it proper to answer this for the reasons set 
forth in answer to the first question as to costs. 

Q. How much fuel per ton of plate is used in carbonizing ?—A. I 
do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. How much did the furnace repairs per ton of carbonized plate 
amount to ?—A. I do not think it proper to answer this for the rea¬ 
sons set forth in answer to the first question as to costs. 

Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, and transportation amount 
to per ton of carbonized plate ?—A. I do not think it proper to answer 
this for the reasons set forth in answer to the first question as to costs. 

The Chairman. I would imagine, Mr. Dinkey, that a good many of 
these questions, instead of being refused answer on account of the 
unwillingness of the company to expose its secrets to the world, would 
better be answered by saying that the records of the company were 
not kept sufficiently accurate for you to reply. We are asking a good 
many questions which you can not answer because the company did 
not think it worth while to keep a record of these things in the books. 

Mr. Dinkey. I am obliged to you, Senator, for the thought. It 
was going through my mind that some of these questions are impos¬ 
sible to answer. 

The Chairman. Not because you do not want the world to know, 
but because the company has not taken the precaution or did not 
feel it necessary to keep itself informed on these matters. 

Admiral Strauss. Of course, there are some of them that your 
original answer would have to apply to. 

The Chairman. And we will leave it to his discretion what he will 
say about those, and which ones he will leave because he does not 
know, and which he will leave because he does not want the world 
to know. 

Q. How much is the carbonized plate worth per ton without 
machining?—A. I do not think it proper to answer this for the 
reasons set forth in the answer to the first question as to costs. 

Q. How many tons of armor plate were reiorged by your company 
during the past year?—A. Thirteen thousand five hundred and 
sixty-one gross tons. 


ARMOR PLANT FOR THE UNITED STATES. 29 

Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
working the cost of armor?—A. Two thousand one hundred and 
seventy gross tons rejected. I do not think rt proper to give the 
amount of allowance. 

The Chairman. Perhaps we are suggesting a new method of book- 
keepingfor you. 

Mr. Dinkey. A new method of accounting might enable us to 
answer more of your questions, but be of little value to us as a 
manufacturer. 

The Chairman. We feel compelled to probe as far as we can, to 
get the facts. You understand our position. 

Mr. Dinkey. Certainly; you come into the thing new, and we have 
all this history of armor making back of us. 

Q. What does the labor per ton for reforging amount to?—A. I 
do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. What do the repairs per ton for reforging amount to ?—A. I do 
not think it proper to answer this for the reasons set forth in answer 
to the first question as to costs. 

Q. What does the fuel per ton for reforging amount to ?—A. I do 
not think it proper to answer this for the reasons set forth in answer 
to the first question as to costs. 

Q. What is the proportional amount of power—electric, steam, 
water—for reforging?—A. I do not think it proper to answer this 
for the reasons set forth in answer to the first question as to costs. 

Q. What does the proportional drafting, inspection, transportation, 
and laboratory for reforging amount to ?—A. I do not think it proper 
to answer this for the reasons set forth in answer to the first question 
as to costs. 

Q. How much discard is made after reforging?—A. No discard. 

Mr. Padgett. Can you give us a general estimate from your 
experience in the manufacture of armor—a reasonable estimate? 

Mr. Dinkey. As a matter of practice no discard is made at this 
point. 

Mr. Padgett. The best guess you can. 

Mr. Dinkey. Answered by preceding reply. 

Q. What allowance is made for this discard in reckoning the cost ?— 
A. I do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. What is the cost of armor per ton after reforging ?—A. I do not 
think it proper to answer this for the reasons set forth in answer to 
the first question as to costs. 

Q. How many tons of armor plate were sent to treatment by your 
company during the past year ?—A. Eleven thousand three hundred 
and ninety-one gross tons. 

Q. How many tons were lost during treatment by rejection?— 
A. One thousand one hundred and fifteen gross tons. 

Q. What does the labor per ton of treated plate amount to ?—A. 
I do not think it proper to answer this for reasons set forth in answer 
to the first question as to costs. 


30 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What does the material per ton of treated plate amount to ?—A. 
I do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. What do the repairs per ton of treated plate amount to ?—A. 
I do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. What does the fuel per ton of treated plate amount to ?—A. I do 
not think it proper to answer this for the reasons set forth in answer 
to the first question as to costs. 

Q. What do the proportional charges per ton of treated plate 
amount to ?—A. I do not think it proper to answer this for the rea¬ 
sons set forth in answer to the first question as to costs. 

Q. What is the total cost per ton of treated and rectified plate ?— 
A. I do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. How many tons of armor plate were sent to machining by your 
company last year ?—A. Ten thousand two hundred and seventy-six 
gross tons. 

Q. How many tons of machined plate were produced-last year?— 
A. Six thousand two hundred and sixty-seven gross tons. 

Q. Were there any rejections during the process of machining? 
If so, how many tons, and what allowance was made for the rejected 
material in reckoning the final cost?—A. Two hundred and twelve 
gross tons were rejected. I do not think it proper to give the amount 
of the allowance. 

The Chairman. Right there, I think it desirable that I, as chair¬ 
man, should ask you this question. In what way have you arrived 
at the cost of this armor to the factory upon which to base the charge 
to the Government for it ? 

Mr. Dinkey. That will start me answering the first question as to 
costs. 

The Chairman. I feel it is my duty to find out why you charge the 
Government so much, and if we can not make it cheaper than you 
are selling it to us. 

Mr. Dinkey. I can only answer in general terms, that my judg¬ 
ment is that the prices we have been asking are only fair and reason¬ 
able prices. 

The Chairman. Is there any agreement, implied or expressed, 
between you and the other manufacturers of armor as to what prices 
shall be charged the Government? 

Mr. Dinkey. None whatever. 

The Chairman. You do not meet and combine instead of com¬ 
peting ? 

Mr. Dinkey. No, sir; not even a suggestion of meeting and com¬ 
bining. 

The Chairman. You know there are only three armor manufac¬ 
turers in the United States? 

Mr. Dinkey. Yes, sir. 

The Chairman. You know, further, that when the Navy Depart¬ 
ment first went into this armor business, some twenty-odd years ago, 
they had to get the Bethlehem Steel Co. to make it in this country 


ARMOR PLANT FOR THE UNITED STATES. 


31 


rather than buy it abroad, and the Bethlehem Steel Co., as I recall 
the facts, stated that in order to enter into the manufacture of armor 
they would have an extraordinary expense to incur and they would 
have to charge such and such a price for the armor if they made a 
contract with the Government, in order to reimburse themselves. 
The Government agreed to that price, in fact paid for the increased 
appliances, hammers, steam press, and all that sort of thing, and yet 
the price remains way up yonder—did not come down after they had 
provided at the Government’s expense in the first contract for all 
these new appliances which they required in order to make armor at 
all. That is a matter of official record in Washington. 

Mr. Dinkey. I have no information with respect to the original 
contract with the Bethlehem Co. I do know, however, that the armor 
Bethlehem started to make is not to be compared, as to quality or 
cost of production, with the armor we are now furnishing. 

The Chairman. Do you know the origin of the contract with 
Carnegie ? 

A. I have no direct information. I understand, however, that the 
chief difficulties were serious delays in delivery. 

The Chairman. And they had to get another factory ? 

Mr. Dinkey. That would help the situation, but chiefly with re¬ 
spect to delivery. The original contract, as I understood it, was 
divided at the same price that the contract was given to the Bethle¬ 
hem Steel Co.; that is, the department offered the Carnegie Steel 
Co. the Bethlehem Steel Co.’s price if they would take a portion of 
the armor that had already been given to Bethlehem. That may be 
incorrect, but I am speaking merely from general information on the 
subject. 

The Chairman. You are familiar with the fact, of course, that the 
Navy Department had to penalize Mr. Carnegie because of the 
failure to deliver the armor according to contract, and that President 
Cleveland remitted that fine ? 

Mr. Dinkey. Is it necessary to answer that question? 

The Chairman. I think it absolutely necessary that it should go 
in, because it is a very important fact in this investigation. 

Mr. Dinkey. I just wondered if you thought it was material to 
put that in. As far as my own knowledge goes, I really do not know 
anything about it. 

The Chairman. Well, we can not save the record that fact; no, sir. 
We can bring it out better by going back and putting in the official 
documents which would prove it, and I think we will do that, Mr. 
Padgett, when we get back to Washington. 

Mr. Padgett. If it becomes necessary we could put them in. 

The Chairman. I think it very important that the fact should be 
brought out officially. This history of the fine and its reduction from 
15 per cent to 10 per cent by President Cleveland is found in the 
House Reports, second session, Fifty-third Congress, 1893-1894, 
volume 5. The total amount of the fine assessed was $140,484.94, 
of which the informants received 25 per cent. The informants were 
four steel workers employed by the company. They employed a 
lawyer who reported to the then Secretary of the Navy, Hilary 


32 


ARMOR PLANT FOR THE UNITED STATES. 


Herbert. The Secretary appointed a board, of which Admiral Samp¬ 
son was head, to investigate and report. It was upon the findings 
of that board that the fine of 15 per cent was assessed and reduced 
by President Cleveland to 10 per cent. 

On the 1st of March, 1897, Senator Tillman in a speech in the 
Senate quoted from the Record as follows: 

Q. How much per ton does the labor of machining amount to ?— 
A. I do not think it proper to answer this for the reasons set forth in 
answer to the original question as to costs. 

THE CHARGES AGAINST THE COMPANY. 

[Congressional Record, Aug. 23, 1894, p. 8638.] 

First. The plates did not receive the uniform treatment required by the specifica¬ 
tions of the contracts. In many cases the treatment was irregular, and in other cases it 
was practically inefficient. The specifications of the contract of February 28, 1893, 
required that each plate should be annealed, oil tempered, and again annealed, the 
last process being an annealing one. 

Second. False reports of the treatment of the plates were systematically made 
by the Government inspectors. This was in violation of paragraph 95 of the circular 
concerning armor-plate appurtenances, dated January 16, 1893, which was made a 
part of the contract. Paragraph 95 says: 

“The contractor shall state for each article in writing the exact treatment it has 
received.” 

The specifications of the contract of November 20, 1890, paragraph 164, says: 

“A written statement of work and contractor’s tests to be commenced and in progress 
each day must be furnished to the chief inspector.” 

Third. No bolts received the double treatment provided for in the specifications 
of either contract. A report of a double treatment, however, was made to the Govern¬ 
ment inspectors. 

Fourth. Specimens taken from the plates both before and after treatment to ascer¬ 
tain the tensile strength of each plate were stretched without the knowledge of the 
Government inspectors, so as to increase their apparent tensile strength when actually 
tested. 

Fifth. False specimens taken from other plates were substituted for the specimens 
selected by the Government inspectors. 

Sixth. The testing machine was repeatedly manipulated by order of the superin¬ 
tendent of the armor-plate mill so as to increase the apparent tensile strength of the 
specimens. These specimens were juggled in measurement so as to increase their 
apparent ductility. 

Seventh. Various specimens selected by the Government inspectors were re-treated 
without their knowledge before they were submitted to test. 

Eighth. Plates selected by the Government inspectors for ballistic test were re¬ 
treated with the intention of improving their ballistic resistance, without the knowl¬ 
edge of the Government inspectors. In one case, at least, the conclusion is almost 
irresistible that the bottom of another plate was substituted for the top half of plate 
A 619 after it had been selected by the Government and while awaiting shipment 
to Indian Head. Upon this ballistic test a group of plates containing 348 tons, valued 
at about $180,000, were to be accepted or rejected. In three cases, at least, the plates 
selected by the Government inspectors were re-treated in this manner without their 
knowledge. These ballistic plates represented 779 tons of armor, valued at over 
$110,000. The groups represented by these three plates had all been submitted for 
premium of $30 per ton if they passed a more severe test than required for acceptance. 

Ninth. In violation of the specifications of the contract, pipes or shrinking cavities, 
erroneously called blowholes, in the plates were plugged by the contractors and the 
defects concealed from the Government inspectors. These cavities, in some cases, 
diminished the resistance and value of the plate. 

Tenth. The inspector’s stamp was either duplicated or stolen, and used without 
the knowledge of the Government inspectors. 

Eleventh. The Government inspector in inspecting bolts was deceived by means 
of false templets or gauges. 


ARMOR PLANT FOR THE UNITED STATES. 


33 


Continuing, he said: 

The House of Representatives sent to you a resolution to have certain plates 
tested upon your new Navy to prove the frauds which had been practiced upon the 
Government. 

That resolution came over here and went to s’eep and died without action, and Mr. 
Carnegie sports his steam yacht and floats back to Scotland to his game preserve. 

Here is a list of the ships of our new Navy—our boasted new Navy, the one we 
love so, and that we pet so. 

Four on the Monterey , 6 on the Monadnock, 8 on the New York, 
4 on the Amphitrite, 3 on the Terror , 3 on the Oregon, 3 on the Olympia, 
6 on the Indiana, 4 on the Massachusetts, and so on. 

This is only a partial list of the ships the plates on which were con¬ 
fessed to have been plugged up, or not tempered, or some other thing 
which would weaken them ana make them worthless, and not accord¬ 
ing to contract. 

Q. Flow much does the machined scrap amount to ?—A. I do not 
think it proper to answer this for the reasons set forth in answer to 
the original question as to costs. 

Q. How much does the material for machining amount to, includ¬ 
ing oil, waste, repairing of tools, and supply of tools?—A. I do not 
think it proper to answer this for the reasons set forth in answer to 
the original question as to costs. 

Q. How much do the repairs per ton of machined plate amount to 
during the machining operation?—A. I do not think it proper to 
answer this for the reasons set forth in answer to the original as to 
costs. 

Q. What do the proportional charges per ton of machined plate 
amount to?—A. 1 do not think it proper to answer this for the 
reasons set forth in answer to the original question as to costs. 

Q. What is the cost per ton of machined plate produced?—A. I do 
not think it proper to answer this for the reasons set forth in answer 
to the original question as to costs. 

Q. How many tons of machined plate were presented by your 
company for shipment last year?—A. Five thousand nine hundred 
and nineteen gross tons. 

Q. What do the labor and material for preparation for shipment 
amount to per ton of finished plate ?—A. I do not think it proper to 
answer this for the reasons set forth in answer to the first question 
as to costs. 

Q. How are the total, water, steam, power, transportation, inspec¬ 
tion, drafting, and laboratory charges reckoned?—A. I do not think 
it proper to answer for the reasons set forth in answer to the first 
question as to costs. 

Q. What were the total power charges for your plant last year— 
by powder charges is meant electric power, steam power, water power, 
or producer gas for running engines, as the case may be—and how 
did you arrive at the method of assigning the various proportions to 
the various operations?—A. I do not think it proper to answer this 
for the reasons set forth in answer to the original question as to costs. 

Q. The same information is desired for the laboratory, drafting, 
inspection, and transportation charges—A. I do not think it proper 
to answer for the reasons set forth in answer to the original question 
as to costs. 

83344—H. Doc. 1620, 63-3-3 , 


34 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What is the cost per ton of class B shipped plates?—A. I do 
not think it proper to answer this for the reasons set forth in answer 
to the first question as to costs. 

Q. What was the average cost per ton of class C steel armor ?—A. 
This refers to bolts, nuts, etc., which we do not manufacture. 

Q. What do you reckon your working capital to be ?—A. I do not 
think it proper to answer this for the reasons set forth in answer to the 
original question as to costs. 

Q. What does the maintenance of your plant amount to per an¬ 
num ?—A. I do not think it proper to answer this for the reasons set 
forth in answer to the first question as to costs. 

Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture, 
and separate from depreciation?—A. I do not think it proper to 
answer this for the reasons set forth in answer to the original question 
as to costs. 

Q. What does this maintenance mean ? To what is it applied ?-— 
A. I do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. What is the total of proportional administration charges made 
to armor? How has this been arrived at?—A. I do not think it 
proper to answer this for the reasons set forth in answer to the first 
question as to costs. 

Q. Give a tabulated list showing the various salaries paid and how 
proportionately divided, so as to include the armor plant.—A. I do 
not think it proper to answer this for the reasons set forth in answer 
to the first question as to costs. 

The Chairman. You could not furnish that information ? 

Mr. Dinkey. I do not think I ought to. 

The Chairman. Well, I think it would be very interesting for the 
outside world to know just how much the Steel Trust was able to pay 
its employees as compared with men of equally high intelligence and 
ability outside. 

Q. How much did the insurance charges on your armor plant 
amount to ?—A. I do not think it proper to answer this for the 
reasons set forth in answer to the original question as to costs. 

Q. How much taxes are chargeable to armor plant ?—A. I do not 
think it proper to answer this for the reasons set forth in answer to the 
first question as to costs. 

The Chairman. It appears to me that the way this investigation 
is going we will have no report to make at all. We are really getting 
little or no information and, evidently, must rely on other sources 
for the facts upon which to base our report. 

Admiral Strauss. In regard to this question, “How much taxes 
are chargeable to the armor plant,” is not such a charge part of the 
public records, the municipal records ? 

Mr. Dinkey. Our records have not subdivided the cost of taxes on 
the Homestead Steel Works so as to give us what proportion is prop¬ 
erly chargeable to the armor department. 

Q. How much do you charge to armor in behalf of the pension 
fund?—A. I do not think we have that subdivided. We charge 


ARMOR PLANT FOR THE UNITED STATES. 


35 


nothing to armor for pension fund, but we do charge a rate for pro¬ 
tection of casualty to employees while they are sick and away owing 
to injuries. 

Admiral Strauss. Insurance, then, you would call it? 

Mr. Dinkey. You could call it a provision to take care of that 
expense. 

Q. How much depreciation is charged against the armor plant?— 
A. I do not think it proper to answer this ior the reasons set forth in 
the answer to the first question as to costs. 

Q. What is this depreciation and how has it been arrived at ?—A. 
I do not think it proper to answer this for the reasons set forth in 
answer to the first question as to costs. 

Q. After a year’s operations within which a certain sum of money 
has been set aside from the proceeds of the manufacture of armor for 
depreciation charge, what is done with this money?—A. I do not 
think it proper to answer this for the reasons set forth in the answer 
to the first question as to costs. 

Q. After depreciation charge has been made to a year’s operation, 
and there have been no replacements of tools, is this amount used 
to amortize the original investment ?—A. I do not think it proper to 
answer this for the reasons set forth in answer to the original question 
as to costs. 

Q. Since the erection of your armor plant what has been the total 
amount of depreciation which has been charged into the cost of 
armor?—A. I do not think it proper to answer for the reasons set 
forth in answer to the original question as to costs. 

Q. How much, if any, of this sum of money has been actually 
used for the installation of new machinery in place of old, for building 
new buildings, furnaces, etc., in place of old, and has this expendi¬ 
ture been added to the capital account ?—A. I do not think it proper 
to answer this for the reasons set forth in answer to the original 
question as to costs. 

Q. The remainder of this sum of money which has not been ex¬ 
pended, has it been used for amortizing any of the original invest¬ 
ment?—A. I do not think it proper to answer for the reasons set 
forth in the answer to the first question as to costs. 

Q. How much money is invested in your armor plant?—A. This 
question is answered later. 

Q. Does this represent the total amount which has been expended 
for this plant, inclusive of all depreciation replacements ?—A. It does 
not include depreciation replacements. 

Q. In reckoning your profit, is it reckoned as a profit on the total 
amount of money which nas been put into the armor plant or on the 
amount which has been put into the armor plant less all depreciation 
which has not been used for the purpose of replacement ?—A. I do 
not think it proper to answer this for the reasons set forth in answer 
to the first question as to costs. 

Mr. Padgett. I wanted to ask a question, please. In 1897 Mr. 
Schwab appeared before the committee that was investigating at 
that time and he stated: 

It is a very difficult thing to fix the price of any article in which quantity and 
quality do not enter. Quantity and quality are the two essential things in fixing 


36 


ARMOR PLANT FOR THE UNITED STATES. 


tlie price of any article. Quantity is, as I have pointed out to you, especially im¬ 
portant. We have only made 2,000 tons per year at the bare cost of 50 per cent higher 
tonnage. I am prepared to say that if you will give us 3,000 tons of armor per year, 
as estimated, we v ill give you a rebate of $50 per ton upon every ton over that quantity. 
If you will give us 3,500 tons of armor per year, we will give you a rebate of $100 per 
ton for every ton over that quantity. 

Now, in connection with that statement that was made there, the 
last contract that was awarded was for 25,000 tons, divided, I believe, 
between two concerns. There were 25,000 tons awarded, two- 
thirds of it going to the Bethlehem Steel Co. and one-third to the 
Midvale Steel Co. I wanted to ask you what would be a reasonable 
reduction on the basis of 16,000 tons to one and 8,000 tons to the 
other, in comparison with the rebates or reductions, as stated in the 
answer of Mr. Schwab? 

The Chairman. Proposed to be given. 

Mr. Padgett. Yes; proposed to be given. 

Mr. Dinkey. I think Mr. Schwab ought to answer that. He had, 
of course, some particular thing in his mind when he made that 
statement. 

The Chairman. Mr. Schwab isn’t in America just now? 

Mr. Dinkey. I think he is. He has just landed. 

Mr. Padgett. I would like to ask if you would give any expression 
of your opinion if they could not have reduced the price reasonably 
below $425 a ton on getting so large an order ? 

Mr. Dinkey. My judgment is that they could not; $450 per ton is 
a reasonable price for the quality of armor now demanded by the 
United States Government. 

Mr. Padgett. In 1894 Mr. Frick was testifying before a committee, 
and he testified: 

“ When we went into the manufacture of armor we had a rolling mill, which is a very 
extensive mill, I think probably the largest of its kind in the world. In addition to 
that, not including the ground, we purchased a larger piece of valuable ground. We 
spent $2,600,000, so I think that you can safely say we have invested in the manufac¬ 
ture of armor $4,000,000.” 

Then a question was asked: 

“ But since you have begun the manufacture you have put in this machinery, or 
rather, since you accepted this contract you have put in this machinery?” 

And then a question was asked: 

That would account in a great measure for the $3,000,000 expended for the plant. 
If you had known exactly what you would have required, it might be that the plant 
would not have cost so much? 

Answer: 

“ I believe that the plant could be duplicated for somewhat less, but not very much 
less. In 1906 the Carnegie Co. estimated its total investment in armor plant at 
$5,905,425.” 

This estimate includes $4,730,425 as the actual cost of construction 
in armor plant since its commencement, as shown on the books of 
the company, and added $1,175,000 as the allowed cost of the land 
occupied. Now, since that time can you state what the company 
has paid in to increase the plant of the company, not paid out of 
the profits of the company? 


ARMOR PLANT FOR THE UNITED STATES. 


37 


Mr. Dinkey. Well, of course, I can say what has been added since 
1906. I can tell you what has been added to our factory equipment 
since 1906, if you leave out “not paid out of the profits.” Of course, 
the profits are in the profit and loss account, and they do not stand 
in a separate fund; they stand in one fund. 

Mr. Padgett. I will ask you to put in a statement of what you 
have added to the capital of the company since 1906. 

Mr. Dinkey. Instead of capital can you make it what we have 
added to the factory? What additions have been made to the 
factory ? 

Mr. Padgett. Yes. 

Mr. Dinkey. Because we have not changed our capital account. 
We do not change that, but I can put in what additions have been 
made to the factory. 

Admiral Strauss. Do you mean what additions have been made 
in buildings and machinery? 

Mr. Dinkey. Yes; new equipment, if any. A few tools have been 
bought, and I think there are some extensions to the treating shop. 
There are quite important extensions to the treating shop. 

Admiral Strauss. You say that is not charged to your account of 
capital invested in the production of armor? 

Mr. Dinkey. No; that part of our bookkeeping is not changed. 
You see the Carnegie Steel Co.’s capital is a fixed amount. 

Admiral Strauss. I mean to your investment in the armor business 
proper. 

Mr. Dinkey. It is set up against our investment account; yes. And 
the investment account and additions to the property are the same 
thing, the two items are the same. 

Admiral Strauss. You say you propose to give these additional 
investments ? 

Mr. Dinkey. Yes. 

Admiral Strauss. By items ? 

Mr. Dinkey. I will subdivide it so that it is legible to you. I think 
I will put it “Extensions to the treating shop” and “New tools/'* 
and then I will show what they are and will add them to the 1906 
figures. 

Admiral Strauss. Will you give your additions of furnaces? 

Mr. Dinkey. We will give the number of furnaces and the cost per 
furnace in such a way that you can see the cost per furnace. I find 
that, as stated by Mr. Padgett, we reported in 1906 that we estimated 
our total investment in our armor plant and auxiliary facilities up 
to December 31, 1905, as being $5,905,425, which included the sum of 
$450,000 for about 30 acres of land used for the plant, the balance cov¬ 
ering buildings, furnaces, presses, and all other tools and appliances. 
Since that time we have expended for additions (not replacements), 
$220,421.44 made up of the following items: 


Press shop—manipulator. $7,779.21 

Extensions and additions to carbonizing shop.- - 121,099. 70 

Additions to machine shop: 

Two milling machines. $47, 331. 25 

One pit planer. 18, 274. 64 

One boring mill. 4, 859. 85 

One 125-ton crane. 21,076. 79 

—- 91, 542. 53 









38 


ARMOR PLANT FOR THE UNITED STATES. 


This brings our total investment, at the present time, up to 
$6,125,846.44. It appears from the foregoing list of additions that 
we have not added any furnaces since 1906. Considerable additions 
have been made to the general facilities of the plant, such as cars, 
stocking tools, etc., which are employed only a portion of the time 
in the process of armor making. No portion of the amount of these 
expenditures is included in the above statement. 

The Chairman. Mr. Dinkey, it would appear to be the case that 
the system of bookkeeping does not admit of any analysis of the cost 
of armor, and I am afraid we would never get at the real facts even 
if we should have full access to your books or have an expert go 
through them. 

Mr. Dinkey. I think you would have difficulty in using our figures 
to any advantage to yourselves; I think that is true. 

The Chairman. You realize that our duty to the people is diamet¬ 
rically opposed to your ideas of your duty to the Carnegie Steel Co., 
the Steel Trust, as it is called. You feel bound to protect your em¬ 
ployers or your bosses, whoever they are, and we feel bound to pro¬ 
tect our bosses who have sent us here. To that extent the two 
interests are opposed. 

Mr. Dinkey. Of course a natural opposition is there; at the same 
time I am not conscious of interposing greater objections than seem 
to be necessary under the circumstances. 

The Chairman. Would you be willing for a naval expert accountant 
to go through your books ? 

Mr. Dinkey. I would not be willing. 

Admiral Strauss. Mr. Dinkey, do you think that your system of 
bookkeeping properly accounts for everything, every cost that should 
be allotted to the production of armor, in such a way as to permit 
you to give an intelligent bid for armor? That is, do you know 
yourselves exactly what that armor costs, including your material, 
labor, shop overhead, and all administrative and depreciation 
expenses ? 

Mr. Dinkey. Of course, I think it does, within a proper meaning 
of that question; I think it does. 

Mr. Padgett. Returning to the question I asked a while ago 
about the increase to your investment or to the enlargement of your 
plant, etc. Will you state whether or not it was paid out of the 
amount that was set apart as depreciation to the plant, or whether 
it was paid out of the general profits ? 

Mr. Dinkey. In an informal way, I will say that these funds are 
not kept separate, they are paid out of the general funds of the 
Carnegie Steel Co. 

Mr. Padgett. Do you charge up as an item of cost in the manu¬ 
facture of armor a per cent or an item known as depreciation of 
plant ? 

Mr. Dinkey. We have a heading. Our system is not to charge 
directly into the individual costs an item of depreciation. We deduct 
that from the profit and loss. But we do, of course, reckon with that 
factor whenever we are estimating to arrive at a total cost for selling 
purposes. 


ARMOR PLANT FOR THE UNITED STATES. 


39 


Mr. Padgett. Along the same line can you state, since you com¬ 
menced the manufacture of armor, whether the aggregate of the 
amount that you have charged as depreciation of plant is more or 
less than the amount that has been expended for the extension and 
improvement of the plant ? 

Mr. Dinkey. I find it impossible to answer this question. 

The Chairman. When did the Midvale people commence to make 
armor ? 

Mr. Dinkey. About the year 1906. 

The Chairman. I recall that up to the time that the Midvale 

S le came forward with their bids the Government considered 
helpless and had to pay whatever Carnegie and Bethlehem 
charged tnem. 

Mr. Dinkey. I have no information as to the situation in which 
the Government considered itself to be. 

The Chairman. There seems to have been no difficulty whatever, 
because you had the Government in your power and could compel it 
to accept your price or go without, and the idea I have is that the 
only protection the Government can have is to build an armor plant 
of its own, the same as we have built a powder plant. It may be 
that the European war will demonstrate that armor is no longer 
needed at all. 

Mr. Dinkey. We never considered that the Government was in 
our power. Our necessities as sellers were greater than the Govern¬ 
ment’s necessities as a buyer. If the European war does so demon¬ 
strate, that will dispose of the whole question. 

The Chairman. We will quit building battleships, but it will not 
dispose of you, because the Steel Trust wdl be here when I am dead and 
gone, and perhaps when you are dead and gone. You declined a 
little while ago to allow us to send a naval expert accountant to go 
through your books. Does not the law give the Department of 
Commerce that power now ? 

Mr. Padgett. I do not know, Senator. 

The Chairman. Has anybody investigated this plant before? 

Mr. Campbell. There have been a number of investigators from 
the Navy Department on the job at different times. You will 
remember the Alger Board was down there. One time they followed 
our figures up to that time as to investment in armor plant. Then 
there was the Niles Board, and they got a lot of information. 

Mr. Dinkey. Then McLean, afterwards McLean & McVay. Be¬ 
fore an armor contract is let the question of the quality of the 
armor to be supplied is always a feature of the discussion. The 
Government does not find itself so helpless with respect to pushing 
up the quality required. The Government is not in a helpless posi¬ 
tion by any means. A seller has to sell just as much as a buyer has to 
buy. I have to find customers. 

The Chairman. Provided you keep on making armor. But if 

you turned your plant to some other purpose- 

Mr. Dinkey (interposing). No; that is not true, Senator. 

The Chairman. You have got some appliances down there that are 
needed only for making armor ? 


40 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Dinkey. Yes, sir; and they can not be used for anything else. 

The Chairman. And therefore, they would be a dead loss to you 
if the Government should go into the manufacture of its own armor. 
The Government is helpless, so far as the price of armor is concerned, 
when there are only three makers of it, and they are working in 
combination, charging whatever price they agree upon. 

Mr. Dinkey. The three are not in collusion. 

The Chairman. You say so, but we think they are. I hope you 
are telling the truth. 

Mr. Dinkey. I can tell you now that they are not in collusion, and 
I do not know how I can make you believe that I am telling the truth. 

The Chairman. The fact that Carnegie did not get any of this last 
contract would indicate that some how or other the cogs had slipped 
and the machine did not work well. Do you know just why you 
did not get it ? Are you willing to tell ? 

Mr. Dinkey. I tried hard enough to get it, but could not. I tried 
to meet the Secretary’s views, and I did revise my bids after he 
asked us to, and I did not make them sufficiently low, I imagine. 

Mr. Padgett. Upon that question, however, the contract was 
awarded to the other two with the stipulation that they could sublet 
part of the contract, and you are not out of the game yet. 

Mr. Dinkey. The deliveries required are faster than the plants 
that have the contracts will be able to make them. 

The Chairman. Therefore they will have to come to you because 
you are the only other man that can help them out. Don’t you see 
that you have got the Government in your power ? 

Mr. Dinkey. I do not think I have. 

The Chairman. If the Government can only get from certain fac- ' 
tories its armor, and nobody else can supply it, it seems to me that 
the Government is utterly helpless. 

Mr. Dinkey. Look at the other side. These tools are useful only 
for Government work. If the Government does not buy they stand 
idle. 

The Chairman. What is the exact cost of that class of tools ? 

Mr. Dinkey. Approximately $5,000,000. 

The Chairman. Will you supply that estimation? 

Mr. Dinkey. Yes; practically all the equipment which we call the 
armor department is useful only for making armor. 

The Chairman. Can you not adapt it to some other manufacture ? 

Mr. Dinkey. No, sir. 

The Chairman. It would be a dead loss to you, then, if the Govern¬ 
ment should go into the manufacture of its own armor? 

Mr. Dinkey. We would have to tear it out and throw it away and 
find something else to put up on that ground. 

Admiral Strauss. We have a number of questions prepared as to 
the cost of plant. You just stated that you would give us some 
information. I would like to put these questions for such answers as 
Mr. Dinkey will give. 

Mr. Padgett. I would like to ask a question. Would you object 
to informing the committee as to the total amount that you pay per 
annum to your foreman of the armor department ? 


ARMOR PLANT FOR THE UNITED STATES. 41 

Mr. Dinkey. The heads of the departments? I would rather not. 
I think we ought not to do that. 

Mr. Padgett. The superintendent of the armor department. I 
was not interested in any other case, just the armor department. 

Mr. Dinkey. I would like to tell the committee if I could tell them 
for their own information but not a part of the record. 

Mr. Padgett. Of course, you can understand that from our stand¬ 
point the item of salaries is one to be considered by the Government 
in connection with the question of the advisability or nonadvisa¬ 
bility of establishing a plant, and also as to the cost of armor—what 
we would be expected to pay the men who performed certain duties 
iii the manufacture of armor. 

Mr. Dinkey. Yes, this item of salaries is one that you will want to 
be accurately informed about. 

Mr. Padgett. And for that reason I was asking the question. 

Mr. Dinkey. I would not like to make a public record of these 
salaries. 

The Chairman. Does it require any special skill? 

Mr. Dinkey. Oh, yes; most of these men have spent their life¬ 
time at it. 

Admiral Strauss. What is the capacity of the company’s plant 
for armor in tons per year? 

Mr. Dinkey. Approximately 10,000 gross tons. 

Admiral Strauss. How much has this plant cost the company to 
date, for buildings and machinery? 

Mr. Dinkey. This question has been answered. 

Admiral Strauss. This sum to include all buildings and all machi¬ 
nery and equipment now installed, exclusive of site? 

Mr. Dinkey. This question has been answered. 

Admiral Strauss. How many acres are now occupied by your 
plant, including space for stock and coal storage? 

Mr. Dinkey. About 30 acres. 

Admiral Strauss. I would like to ask you what does your plant 
for the production of special-treatment steel plates cost you ? How 
much have you invested in that department ? 

Mr. Dinkey. It is almost impossible to separate the cost. More 
than half of the course of manufacture required for the production of 
special-treatment plate uses the common tools of the Carnegie Steel 

The Chairman. If I understand you, there is no mystery or very 
great expense attached to it, other than ordinary ? 

Mr. Dinkey. The first part of it is right. There is very little mys¬ 
tery, but there is a whoie lot of expense. 

The Chairman. We are concerned with both the mystery and the 
expense. 

Mr. Dinkey. There is very little mystery. Of course, that word 
is not proper to use in connection with manufacturing steel. There 
is no mystery at all; just plain skill and expensive material. 

The Chairman. When we first began to look into this armor busi¬ 
ness, 20 years ago, nickel was considered a very important and nec¬ 
essary ingredient. 


42 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Dinkey. It was. That came out immediately upon the- 

The Chairman (interposing). Nickel is still used in its manufacture ? 

Mr. Dinkey. Yes, sir. 

The Chairman. And afterwards Harvey came in with some 
patents ? 

Mr. Dinkey. And improved the armor that was being bought at 
that time. 

The Chairman. That is still used, the Harvey process ? 

Mr. Dinkey. That process is still used, except as another process 
has been added to it. 

The Chairman. Improving even that ? 

Mr. Dinkey. Improving even that. 

The Chairman. So you use both ? 

Mr. Dinkey. All three of them are represented in the present 
armor; the nickel which was originally used, and the Harvey, which 
was put on top of the nickel, and the Krupp process, which is put on 
top of the Harvey. All three of them are combined in the present 
armor. 

The Chairman. Are any of these patented ? 

Mr. Dinkey. They all were patented, but I think they expired by 
limitation. 

The Chairman. Therefore, the Government could use any or all of 
them without any additional expense ? 

Mr. Dinkey. 1 think the processes that were patented at that time 
are now public property. I think that is true. 

Admiral Strauss. How many men are employed in your armor 
department ? 

* Mr. Dinkey. Approximately 750 men. 

Admiral Strauss. How many shifts are worked. 

Mr. Dinkey. Three shifts. 

Mr. Padgett. Mr. Dinkey, could you give us a reasonable estimate 
of what would be the additional cost of a plant capable of manufac¬ 
turing special-treatment steel, in addition to a strictlv armor-plate 
plant ? In other words, if the Government should establish an armor- 
plate factory, how much additional would it cost to add a plant that 
would make special treatment steel of 1^ inches and then 3 inches in 
thickness ? 

Mr. Dinkey. I will give you what I will consider a reasonable 
estimate. 

Mr. Padgett. Of what that additional would cost ? 

Mr. Dinkey. Yes. 

Mr. Padgett. I should be glad if you would. 

Admiral Strauss. And what the total capacity would be per 
annum. 

Mr. Dinkey. Just let me explain some of the difficulties there. I 
mentioned a little while ago that to make special-treatment plates we 
used in the early stages of its manufacture, clear up until it becomes 
an actual plate ready for tempering, the common tools of the Car¬ 
negie Steel Co., and you can not use anything else. A plate mill in 
which these plates are rolled has a capacity of 15,000 tons a month. 
Well, it can not be a smaller plate mill. So whatever the Government 



ARMOR PLANT FOR THE UNITED STATES. 


48 


will need to buy—say, 8,000 or 10,000 or 12,000 tons of these plates 
per year on a two-ship program or a three-ship program—you could 
not build a plate mill with a capacity of less than 15,000 tons a month, 
and the tools would be standing idle the rest of the year. It would 
roll less than a month all you could possibly use on a three-ship pro¬ 
gram in any year. 

The Chairman. That answer would seem to indicate that it would 
be preposterous for the Government to go into the manufacture of 
special-treatment steel. It could buy the plates and treat them in its 
own plant ? 

Mr. Dinkey. It could do that and it would be a more practical 
thing to do. It is almost impracticable to add a special-treatment 
plant to an armor plant. 

The Chairman. But assuming that it would, I wanted you to give 
us what that additional cost would be. 

Mr. Dinkey. After careful consideration I have come to the con¬ 
clusion that it is impossible to set up an estimate that would be of 
any practical value. 

The Chairman. You can not make special-treatment steel unless 
you treat it like armor ? 

Mr. Dinkey. You can not; that is the finishing process. 

The Chairman. But you can make it out of regular plate steel, 
and plate mills are plentiful. We can buy plate steel almost any¬ 
where and treat it afterwards, if we had an armor plant to treat it in ? 

Mr. Dinkey. That would be the more practical proposition. 

Admiral Strauss. In consideration of the fact that some of these 
questions as submitted, and perhaps some more that will be sub¬ 
mitted, will have to be answered by others than Mr. Dinkey, it has 
been suggested that the other gentlemen who are here to testify be 
sworn and their answers sent by mail. 

STATEMENT OF ME. LOUIS E. CUSTEE. 

Mr. L. R. Custer, being duly sworn, testified as follows: 

The Chairman. What is your name? 

Mr. Custer. Louis R. Custer. 

The Chairman. What is your official connection with the Carnegie 
Steel Co. ? 

Mr. Custer. Superintendent of the armor-plate department of 
Homestead Steel Works. 

Q. How much does it cost your company, f. o. b., to produce a 
ton of K. C. armor, Class A-l ? That is, material, labor, and shop 
overhead charges ?—A. I have nothing to do with matters pertaining 
to costs, and never see the cost records. 

Q. How much do you add to this cost for deterioration of plant 
and administration?—A. I do not know. 

Q. In calculating costs, do you take the annual output of a single 
year or of a term of years, and do you make any allowance for rejec¬ 
tions and ballistic failures ?—A. I do not know. 

Q. What are the various components of this cost per ton?—A. I do 
not know. 


44 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What is the cost per ton of the armor ingot at the forge, includ¬ 
ing all rejections?—A. I do not know. 

Q. Give the components, with their unit prices, that enter into a 
furnace charge for an armor heat.—A. I do not know. 

Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat ?—A. I do not know. 

Q. How much does this amount to per ton of armor ingot pro¬ 
duced?—A. I do not know. 

Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot?—A. 1 do not know. 

Q. What is the fuel charge for each ton of ingot ?—A. I do not know. 

Q. What is the proportional laboratory superintendence charge 
for each ton of ingot ?—A. I do not know. 

Q. What is the lifting, stripping, and chipping charge per ton of 
ingot?—A. I do not know. 

Q. What is the power charge, including steam, electric, and water, 
for each ton of ingot ?—A. I do not know. 

Q. What is the cost for forging ?—A. I do not know. 

Q. What scrap allowance is made for condemned ingots?—A. I do 
not know. 

Q. How many tons of armor ingots did your company manufacture 
last year ?—A. Eighteen thousand eight hundred and thirty-one gross 
tons. 

Q. What was the total number of these ingots in tonnage which 
were rejected before reaching the forge?—A. Five hundred and 
twenty-tour gross tons. 

Q. How many tons of ingots were forged during the past year?— 
A. Eighteen thousand three hundred and seven gross tons. 

Q. How many tons of ingots were rejected during the forging?— 
A. None. 

Q. What scrap allowance was made for these rejected during 
forging?—A. None rejected. 

Q. What was the oxidization and scale loss at the forge ?—A. We 
do not take such record. 

Q. What did the labor for forging each ton of ingot amount to ?— 
A. I do not know* 

Q. What did the fuel for each ton of ingot forged amount to?— 
A. I do not know. 

Q. What did the repairs to heating furnaces amount to for each 
ton of armor ?—A. I do not know. 

Q. What did the electric power, light, steam, water, drafting, trans¬ 
portation, and inspection pei; ton of plate amount to during the 
iorging ?—A. I do not know. 

Q. Of all the ingots forged and not rejected, what percentage was 
discarded—that is, how many tons ?—A. Four thousand seven hun¬ 
dred and forty-six gross tons. 

Q. What allowance was made for the metal thus discarded?— 
A. I do not know. 

Q. What is the unit price per ton of plate when ready for car¬ 
bonizing ?—A. I do not know. 


ARMOR PLANT FOR THE UNITED STATES. 


45 


Q. How many tons of armor plate were carbonized at the works 
of your company last year?—A. Thirteen thousand five hundred 
and sixty-one gross tons. 

Q. What was the oxidization and scale in this treatment, in tons ?— 
A. No record kept. 

Q. What was the total number of plates rejected during carbon- 
zaition?—A. None. 

Q. What does the labor per ton of carbonized plate amount to ?—- 
A. I do not know. 

Q. What does the material per ton of carbonized plate amount 
to ?—A. I do not know. 

Q. How much fuel per ton of plate is used in carbonizing?—- 
A. I do not know. 

Q. How much did the furnace repairs per ton of carbonized plate 
amount to ?—A. I do not know. 

Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, and transportation amount 
to per ton of carbonized plate ?—A. I do not know. 

Q. How much is the carbonized plate worth per ton without 
machining ?—A. I do not know. 

Q. How many tons of armor plate were reforged by your com¬ 
pany during the past year ?—A. Thirteen thousand five hundred and 
sixty-one gross tons. 

Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
working the cost of armor?—A. Two thousand one hundred and 
seventy tons. The usual scrap allowance was made, but I know 
nothing about the amounts so allowed. 

Q. What does the labor per ton for reforging amount to?—A. I 
do not know. 

Q. What do the repairs per ton for reforging amount to ?—A. I do 
not know. 

Q. What does the fuel per ton for reforging amount to?—A. I do 
not know. 

Q. What is the proportional amount of power—electric, steam, 
water—for reforging ?—A. I do not know. 

Q. What does the proportional drafting, inspection, transporta¬ 
tion, and laboratory for reforging amount to ?—A. I do not know. 

Q. How much discard is made after reforging ?—A. None. 

Q. What allowance is made for this discard in reckoning the 
cost?—A. No such discard. 

Q. What is the cost of armor per ton after reforging?—A. I do 
not know. 

Q. How many tons of armor plate were sent to treatment by your 
company during the past year ?—A. Eleven thousand three hundred 
and ninety-one gross tons. 

Q. How many tons were lost during treatment by rejection?— 
A. One thousand one hundred and fifteen gross tons. 

Q. What does the labor per ton of treated plate amount to?— 
A. I do not know. 


46 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What does the material per ton of treated plate amount to?— 
A. I do not know. 

Q. What do the repairs per ton of treated plate amount to ?— 
A. I do not know. 

Q. What does the fuel per ton of treated plate amount to ?—A. I 
do not know. 

Q. What do the proportional charges per ton of treated plate 
amount to ?—A. I do not know. 

Q. What is the total cost per ton of treated and rectified plate?— 
A. I do not know. 

Q. How many tons of armor plate were sent to machining by your 
company last year ?—A. Ten thousand two hundred and seventy-six 
gross tons. 

, Q. How many tons of machined plate were produced last year ?— 
A. Six thousand two hundred and sixty-seven gross tons. 

Q. Were there any rejections during the process of machining; if 
so, how many tons, and what allowance was made for the rejected 
material in reckoning the final cost?—A. Two hundred and twelve 
gross tons rejected. Usual scrap allowance made, but I do not know 
the amounts of such allowance. 

Q. How much per ton does the labor of machining amount to ?— 
A. I do not know. 

Q. How much does the machined scrap amount to ?—A. I do not 
know. 

Q. How much does the material for machining amount to, includ¬ 
ing oil, waste, repairing of tools, and supply of tools?—A. I do not 
know. 

Q. How much do the repairs per ton of machined plate amount to 
during the machining operations ?—A. I do not know. 

Q. What do the proportional charges per ton of machined plate 
amount to ?—A. I do not know. 

Q. What is the cost per ton of machined plate produced ?—A. I do 
not know. 

Q. How many tons of machined plate were presented by your 
company for shipment last year?—A. Five thousand nine hundred 
and nineteen gross tons. 

Q. What do the labor and material for preparation for shipment 
amount to per ton of finished plate ?—A. I do not know. 

Q. How are the total water, steam, power, transportation, inspec¬ 
tion, drafting, and laboratory charges reckoned?—A. I do not know. 

Q. What were the total power charges for your plant last year—by 
power charges is meant electric power, steam power, water power, or 
producer gas for running engines, as the case may be—and how did you 
arrive at the method of assigning the various proportions to the 
various operations ?—A. I do not know. 

Q. The same information is desired for the laboratory, drafting, 
inspection, and transportation charges ?—A. I do not know. 

Q. What is the cost per ton of class A-2 shipped plates ?—A. I do 
not know. 

Q. What is the cost per ton of Class B shipped plates ?—A. I do 
not know. 


ARMOR PLANT FOR THE UNITED STATES. 47 

Q. Wliat was the average cost per ton of Class C steel armor?— 
A. We do not make it. 

Q. What do you reckon your working capital to be ?—A. I do not 
know. 

Q. What does the maintenance of your plant amount to per 
annum ?—A. I do not know. 

Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture, 
and separate from depreciation?—A. I do not know. 

Q. What does this maintenance mean ? To what is it applied ?— 
A. I do not know. 

Q. What is the total of proportional administration charges made 
to armor ? How has this been arrived at ?—A. I do not know. 

Q. Give a tabulated list showing the various salaries paid and how 
proportionately divided, so as to include the armor plant.—A. I do 
not know. 

Q. How much did the insurance charges on your armor plant 
amount to ?—A. I do not know. 

Q. How much taxes are chargeable to the armor plant ?—A. I do 
not know. 

Q. How much do you charge to armor in behalf of the pension 
fund ?—A. I do not know. 

Q. How much depreciation is charged against the armor plant?— 
A. I do not know. 

Q. What is this depreciation and how has it been arrived at?— 
A. I do not know. 

Q. After a year’s operations within which a certain sum of money 
has been set aside from the proceeds of the manufacture of armor for 
depreciation charge what is done with this money?—A. I do not 
know. 

Q. After depreciation charge has been made to a year’s operation, 
and there have been no replacements of tools, is this amount used to 
amortize the original investment ?—A. I do not know. 

Q. Since the erection of your armor plant what has been the total 
amount of depreciation which has been charged into the cost of the 
armor ?—A. I do not know. 

Q. How much, if any, of this sum of money has been actually used 
for the installation of new machinery in place of old, for building new 
buildings, furnaces, etc., in place of old, and has this expenditure 
been added to the capital account ?—A. I do not know. 

Q. The remainder of this sum of money which has not been expend¬ 
ed, has it been used for amortizing any of the original investment ?— 
A. I do not know. 

Q. How much money is invested in your armor plant ?—A. I do not 
know. 

Q. Does this represent the total amount which has been expended 
for this plant, inclusive of all depreciation replacements ?—A. I do not 
know. 

Q. In reckoning your profit is it reckoned as a profit on the total 
amount of money which has been put into the armor plant or on the 
amount which has been put into the armor plant less all deprecia¬ 
tion which has not been used for the purpose of replacement ?—A. I do 
not know. 


48 


ARMOR PLANT FOR THE UNITED STATES. 


STATEMENT OF MR. RALPH H. WATSON. 

Mr. R. H. Watson, being duly sworn, testified as follows: 

The Chairman. What is your name ? 

Mr. Watson. Ralph H. Watson. 

The Chairman. What is your official connection with the Carnegie 
Steel Co. ? 

Mr. Watson. Assistant general superintendent of Homestead 
Steel Works of Carnegie Steel Co. 

Q. How much does it cost your company, f. o. b., to produce a 
ton of K. C. armor, class A-l ? That is, material, labor, and shop- 
overhead charges ? - A. I do not have access to the records of cost of 
the manufacture of armor. Such records are kept in the general 
offices of the company in Pittsburgh. I am, therefore, unable to 
answer the question. 

Q. How much do you add to this cost for deterioration of plant 
and administration ? —A. I do not know. 

Q. In calculating costs do you take the annual output of a single 
year or of a term of years, and do you make any allowance for rejec¬ 
tions and ballistic failures ? —A. I do not know. 

Q. What are the various components of this cost per ton ?—A. I 
do not know. 

Q. What is the cost per ton of the armor ingot at the forge, in¬ 
cluding all rejections ? —A. I do not know. 

Q. Give the components, with their unit prices, that enter into a 
furnace charge for an armor heat.—A. I do not know. 

Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat ?—A. I do not know. 

Q. How much does this amount to per ton of armor ingot pro¬ 
duced ?^-A. I do not know. 

Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot ?—A. I do not know. 

Q. What is the fuel charge for each ton of ingot?—A. I do not 
know. 

Q. What is the proportional laboratory superintendence charge for 
each ton of ingot?—A. I do not know. 

Q. What is the lifting, stripping, and chipping charge per ton of 
ingot ?—A. I do not know. 

Q. What is the power charge, including steam, electric, and water, 
for each ton of ingot?—A. I do not know. 

Q. What is the cost for forging ?—A. I do not know. 

Q. What scrap allowance is made for condemned ingots ?—A. I do 
not know. 

Q. How many tons of armor ingots did your company manufacture 
last year?—A. 18,831 gross tons. 

Q. What was the total number of these ingots in tonnage which 
were rejected before reaching the forge?—A. Five hundred and 
twenty-four gross tons. 

Q. How many tons of ingots were forged during the past year?— 
A. Eighteen thousand three hundred and seven gross tons. 

Q. How many tons of ingots were rejected during the forging?—A. 
None. 


ARMOR PLANT TOR THE UNITED STATES. 49 

Q. What scrap allowance was made for those rejected during 
forging?—A. None rejected. 

Q. What was the oxidization and scale loss at the forge?—A. Such 
records are not made. 

Q. What did the labor for forging each ton of ingot amount to ?—A. 
I do not know. 

Q. What did the fuel for each ton of ingot forged amount to?—A, 
I do not know. 

Q. What did the repairs to heating furnaces amount to for each 
ton of armor?—A. I do not know. 

Q. What did the electric power, light, steam, water, drafting, 
transportation, and inspection per ton of plate amount to during the 
forging?—A. I do not know. 

Q. Of all the ingots forged and not rejected, what percentage was 
discarded; that is, how many tons?—A. Four thousand seven hun¬ 
dred and forty-six gross tons. 

Q. What allowance was made for the metal thus discarded?—A. I 
do not know. 

Q. What is the unit price per ton of plate when ready for carbon¬ 
izing ?—A. I do not know. 

Q. How many tons of armor plate were carbonized at the works of 
your company last year ?—A. Thirteen thousand five hundred and 
sixty-one gross tons. 

Q. What was the oxidation and scale in this treatment in tons ?—A, 
We do not keep a record of it. 

Q. What was the total number of plates rejected during carboniza¬ 
tion?—A. None. 

Q. What does the labor per ton of carbonized plate amount to ?— A. 
I do not know. 

Q. What does the material per ton of carbonized plate amount 
to ?—A. I do not know. 

Q. How much fuel per ton of plate is used in carbonizing?—A. I do 
not know. 

Q. How much did the furnace repairs per ton of carbonized plate 
amount to ?—A. I do not know. 

Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, and transportation amount 
to per ton of carbonized plate ?—A. I do not know. 

Q. How much is the carbonized plate worth per ton without 
machining ?—A. I do not know. 

Q. How many tons of armor plate were reforged by your company 
during the past year ?—A. Thirteen thousand five hundred and sixty- 
one gross tons. 

Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
working the cost of armor?—A. Two thousand one hundred and 
seventy gross tons. The usual scrap allowance was made, but I do 
not know the amount. 

Q. What does the labor per ton for reforging amount to ?—A. I do 
not know. 

Q. What do the repairs per ton for reforging amount to ?—A. I do 
not know. 

83344—H. Doc. 1620, 63—3-4 



50 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What does the fuel for reforging amount to ?—A. I do not know. 

Q. What is the proportional amount of power—electric, steam, 
water—for reforging ?—A. I do not know. 

Q. What does the proportional drafting, inspection, transporta¬ 
tion, and laboratory for reforging amount to ?— A. I do not know. 

Q. How much discard is made after reforging?—A. No discard is 
made after reforging. 

Q. What allowance is made for this discard in reckoning the cost ?— 
A. No discard made. 

Q. What is the cost of armor per ton after reforging?—A. I do 
not know. 

Q. How many tons of armor plate were sent to treatment by your 
company during the past year?—A. Eleven thousand three hundred 
and ninety-one gross tons. 

Q. How many tons were lost during treatment by rejections?—A. 
One thousand one hundred and fifteen gross tons. 

Q. What does the labor per ton of treated plate amount to ?—A. I 
do not know. 

Q. What does the material per ton of treated plate amount to ?— 
A. I do not know. 

Q. What do the repairs per ton of treated plate amount to?—A. 
I do not know. 

Q. What does the fuel per ton of treated plate amount to ?—A. I 
do not know. 

Q. What do the proportional charges per ton of treated plate 
amount to?—A. I do not know. 

Q. What is the total cost per ton of treated and rectified plate ?— 
A. I do not know. 

Q. How many tons of armor plate were sent to machining by 
your company last year?—A. Ten thousand two hundred and 
seventy-six gross tons. 

Q. How many tons of machined plate were produced last year?— 
A. Six thousand two hundred and sixty-seven gross tons. 

Q. Were there any rejections during the process of machining? 
If so, how many tons, and what allowance was made for the rejected 
material in reckoning the final cost?—A. Two hundred and twelve 
gross tons were rejected during the process of machining. Do not 
know the amount of allowance made for the rejected material. 

Q. How much per ton does the labor of machining amount to ?— 
A. I do not know. 

Q. How much does the machined scrap amount to ?—A. I do not 
know. 

Q. How much does the material for machining amount to, in¬ 
cluding oil, waste, repairing of tools, and supply of tools?—A. I do 
not know. 

Q. How much do the repairs per ton of machined plate amount to 
during the machining operations ?—A. I do not know. 

Q. What do the proportional charges per ton of machined plate 
amount to?—A. I do not know. 

Q. What is the cost per ton of machined plate produced?—A. I 
do not know. 


ARMOR PLANT FOR THE UNITED STATES. 


51 


Q. How many tons of machined plate were presented by your 
company for shipment last year?—A. Five thousand nine hundred 
and nineteen gross tons. 

Q. What do the labor and material for preparation for shipment 
amount to per ton of finished plate ?—A. I do not know. 

Q. How are the total water, steam, power, transportation, inspec¬ 
tion, drafting, and laboratory charges reckoned?—A. I do not 
know. 

Q. What were the total power charges for your plant last year— 
by power charges is meant electric power, steam power, water power, 
or producer gas for running engines, as the case may be—and how 
did you arrive at the method of assigning the various proportions to 
the various operations?—A. I do not know. 

Q. The same information is desired for the laboratory, drafting, 
inspection, and transportation charges.—A. I do not know. 

Q. What is the cost per ton of class A-2 shipped plates ?—A. I do 
not know. 

Q. What is the cost per ton of class B shipped plates?—A. I do 
not know. 

Q. What was the average cost per ton of class C steel armor?—A. 
We do not manufacture class C armor. 

Q. What do you reckon your working capital to be ?—A. I do not 
know. 

Q. What does the maintenance of your plant amount to per 
annum ?—A. I do not know. 

Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture, 
and separate from depreciation ?—A. I do not know. 

Q. What does this maintenance mean ? To what is it applied ?— 
A. I do not know. 

Q. What is the total of proportional administration charges made 
to armor ? How has this been arrived at ?—A. I do not know. 

Q. Give a tabulated list showing the various salaries paid, and how 
proportionately divided, so as to include the armor plant.—A. I do 
not know. 

Q. How much did the insurance charges on your armor plant 
amount to ?—A. I do not know. 

Q. How much taxes are chargeable to the armor plant?—A. I do 
not know. 

Q. How much do you charge to armor in behalf of the pension 
fund ?—A. I do not know. 

Q. How much depreciation is charged against the armor plant?— 
A. I do not know. 

Q. What is the depreciation and how has it been arrived at?—A. 
I do not know. 

Q.- After a year's operations within which a certain sum of money 
has been set aside from the proceeds of the manufacture of armor for 
depreciation charge, what is done with this money?—A. I do not 
know. 

Q. After depreciation charge has been made to a year’s operation, 
and there have been no replacements of tools, is this amount used to 
amortize the original investment ?—A. I do not know. 


52 


ARMOR PLANT FOR THE UNITED STATES. 


Q. Since the erection of your armor plate what has been the total 
amount of depreciation which has been charged into the cost of ar¬ 
mor?—A. I do not know. 

Q. How much, if any, of this sum of money has been actually used 
for the installation of new machinery in place of old, for building new 
buildings, furnaces, etc., in place of old, and has this expenditure 
been added to the capital account ?—A. I do not know. 

Q. The remainder of this sum of money which has not been ex¬ 
pended, has it been used for amortizing any of the original invest¬ 
ment?—A. I do not know. 

Q. How much money is invested in your armor plant ?—A I do not 
know. 

Q. Does this represent the total amount which has been expended 
for this plant, inclusive of all depreciation replacements?—A. I do 
not know. 

Q. In reckoning your profit, is it reckoned as a profit on the total 
amount of money which has been put into the armor plant or on the 
amount which has been put into the armor plant less all depreciation 
which has not been used for the purpose of replacement ?—A. I do 
not know. 


STATEMENT OF MR. JAMES J. CAMPBELL. 

Mr. James J. Campbell, being duly sworn, testified as follows: 

Q. The Chairman. What is your name?—A. James J. Campbell. 

Q. What is your official connection with the Carnegie Steel Co. ?— 
A. I am the auditor and assistant secretary of the company and, as 
auditor, am in control of all of the company’s accounting. 

Q. How much does it cost your company, f. o. b., to produce a 
ton of K. C. armor, Class A-l ? That is, material, labor, and shop 
overhead charges.—A. I am not permitted by the policy of our 
company to give out such information. 

Q. How much do you add to this cost for deterioration of plant 
and administration?—A. As this is a detail of our costs, I can not 
state, for the reason given in answer to the preceding question. 

Q. In calculating costs do you take the annual output of a single 
year or of a term of years, and do you make any allowance for 
rejections and ballistic failures?—A. We make monthly costs of our 
armor ingots produced, and at the end of each calendar year make 
up yearly costs of same, taking cognizance of any annual adjustments 
which could not be worked into the monthly costs. From ingots 
forward we carry the manufacturing expenses in suspense until the 
armor plates are finally finished, at which times (monthly) we make 
costs for the finished plates, which also include the costs of the 
ingots used in the process. We try to include in these costs all items 
(whether debits or credits) which properly relate thereto. 

Q. What are the various components of this cost per ton?— 
A. As this is a detail of costs, I can not state, for the reason already 
given. 

Q. What is the cost per ton of the armor ingot at the forge, in¬ 
cluding all rejections ?—A. As this is a detail of costs, I can not state, 
for the reason already given. 

Q. Give the components, with their unit prices, that enter into a 
furnace charge for an armor heat?—A. As this is a detail of costs, 
I can not state, for the reason already given. 


ARMOR PLANT FOR THE UNITED STATES. 


53 


Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat ?—A. As this is a detail of costs, I can 
not state, for the reason already given. 

Q. How much does this amount to per ton of armor ingot pro¬ 
duced ? A. As this is a detail of costs, I can not state, for the reason 
already given. 

Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot ?—A. As this is a detail of costs, I can 
not state, for the reason already given. 

Q. What is the fuel charge for each ton of ingot ?—A. As this is a 
detail of costs, I can not state, for the reason already given. 

Q. What is the proportional laboratory superintendence charge for 
each ton of ingot ?—A. As this is a detail of costs, I can not state, for 
the reason already given. 

Q. What is the lifting, stripping, and chipping charge per ton of 
ingot ?—A. As this is a detail of costs, I can not state, for the reason 
already given. 

Q. What is the power charge, including steam, electric, and water, 
for each ton of ingot ?—A. As this is a detail of costs, I can not state, 
for the reason already given. 

Q. What is the cost for forging ?—A. As this is a detail of costs, I 
can not state for the reason already given. 

Q. What scrap allowance is made for condemned ingots?—A. As 
this is a detail of costs, I can not state for the reason already given. 

Q. How many tons of armor ingots did your company manufacture 
last year ?—A. Eighteen thousand eight hundred and thirty-one gross 
tons. 

Q. What was the total number of these ingots in tonnage which 
were rejected before reaching the forge?—A. Five hundred and 
twenty-four gross tons. 

Q. How many tons of ingots were forged during the past year ?—A. 
Eighteen thousand three hundred and seven gross tons. 

Q. How many tons of ingots were rejected during the forging?—A. 
None. 

Q. What scrap allowance was made for those rejected during 
forging?—A. None rejected. 

Q. What was the oxidation and scale loss at the forge?—A. This 
is also a detail of costs; however, we have no accurate line on what the 
oxidation and scale is at this point in the process. 

Q. What did the labor for forging each ton of ingot amount to ?— 
A. As this is a detail of costs, I can not state for the reason already 
given. 

Q. What did the fuel for each ton of ingot forged amount to ?—A. 
As this is a detail of costs, I can not state for the reason already given. 

Q. What did the repairs to heating furnaces amount to for each 
ton of armor ?—A. As this is a detail of costs, I can not state, for the 
reason already given. 

Q. What did the electric power, light, steam, water, drafting, trans¬ 
portation, and inspection per ton of plate amount to during the 
forging ?—A. As this is a detail of costs, I can not state, for the 
reason already given. 

Q. Of all the ingots forged and not rejected, what percentage was 
discarded ? That is, how many tons ?—A. Four thousand seven hun¬ 
dred and forty-six gross tons. 


54 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What allowance was made for the metal thus discarded ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. What is the unit price per ton of plate when ready for carbon¬ 
izing?—A. As this is a detail of costs, I can not state, for the reason 
already given. 

Q. flow many tons of armor plate were carbonized at the works of 
your company last year?—A. Thirteen thousand five hundred and 
sixty-one gross tons. 

Q. What was the oxidization and scale in this treatment in tons ?— 
A. This is also a detail of cost. However, I would state that we have 
no accurate account of the oxidization and scale in this step of the 
process. 

Q. What was the total number of plates rejected during carboni¬ 
zation?—A. None. 

Q. What does the labor per ton of carbonized plate amount to ?— 
A. As this is a detail of costs, I can not state, for the reason already 
given. 

Q. What does the material per ton of carbonized plate amount 
to?—A. As this is a detail of costs, I can not state, for the reason 
already given. 

Q. How much fuel per ton of plate is used in carbonizing ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. How much did the furnace repairs per ton of carbonized plate 
amount to ?—A. As this is a detail of costs, I can not state, for the 
reason already given. 

Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, and transportation amount 
to per ton of carbonized plate ?—A. As this is a detail of costs, I can 
not state, for the reason already given. 

Q. How much is the carbonized plate worth per ton without 
machining?—A. As this is a detail of costs, I can not state, for the 
reason already given. 

Q. How many tons of armor plate were reforged by your company 
during the past year ?—A. Thirteen thousand five hundred and sixty- 
one gross tons. 

Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
working the cost of armor ?—A. Two thousand one hundred and sev¬ 
enty gross tons. The allowance made therefor is a detail of our cost 
which I am not at liberty to reveal. 

Q. What does the labor per ton for reforging amount to ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. What do the repairs per ton for reforging amount to ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. What does the fuel per ton for reforging amount to ?—A. As this 
is a detail of costs, I can not state, for the reason already given. 

Q. What is the proportional amount of power—electric, steam, 
water—for reforging ?—A. As this is a detail of costs, I can not state, 
for the reason already given. 

Q. What does the proportional drafting, inspection, transportation, 
and laboratory for reforging amount to ?—A. As this is a detail of 
costs, I can not state, for the reason already given. 

Q. How much discard is made after reforging?—A. None. 


ARMOR PLANT FOR THE UNITED STATES. 


55 


Q. What allowance is made for this discard in reckoning the cost?— 
A. No discard made. 

Q. What is the cost of armor per ton after reforging ?—A. As this is 
a detail of costs, I can not state, for the reason already given. 

Q. How many tons of armor plate were sent to treatment by your 
company during the past year?—A. Eleven thousand three hundred 
and ninety-one gross tons. 

Q. How many tons were lost during treatment by rejection?—A. 
One thousand one hundred and fifteen gross tons. 

Q. What does the labor per ton of treated plate amount to ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. What does the material per ton of treated plate amount to ?—A. 
As this is a detail of costs, 1 can not state, for the reason already given. 

Q. What do the repairs per ton of treated plate amount to ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. What does the fuel per ton of treated plate amount to ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. What do the proportional charges per ton of treated plate 
amount to ?—A. As this is a detail of costs, I can not state, for the 
reason already given. 

Q. What is the total cost per ton of treated and rectified plate ?— 
A. As this is a detail of costs, I can not state, for the reason already 
given. 

Q. How many tons of armor plate were sent to machining by your 
company last year ?—A. Ten thousand two hundred and seventy-six 
gross tons. 

Q. How many tons of machined plate were produced last year ?— 
A. Six thousand two hundred and sixty-seven gross tons. 

Q. Were there any rejections during the process of machining? If 
so, how many tons, and what allowance was made for the rejected 
material in reckoning the final cost?—A. Two hundred and twelve 

f ross tons. The allowance made therefor is a detail of our cost which 
am not at liberty to reveal. 

Q. How much per ton does the labor of machining amount to ?— 
A. As this is a detail of costs, I can not state, for the reason already 
given. 

Q. How much does the machined scrap amount to?—A. As this 
is a detail of costs, I can not state, for the reason already given. 

Q. How much does the material for machining amount to, includ¬ 
ing oil, waste, repairing of tools, and supply of tools ?—A. As this is 
a detail of costs, I can not state, for the reason already given. 

Q. How much do the repairs per ton of machined plate amount to 
during the machining operations?—A. As this is a detail of costs, I 
can not state, for the reason already given. 

Q. What do the proportional charges per ton of machined plate 
amount to ?—A. As this is a detail of costs, I can not state, for the 
reason already given. 

Q. What is the cost per ton of machined plate produced ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. How many tons of machined plate were presented by your 
company for shipment last year?—A. Five thousand nine hundred 
and nineteen gross tons. 


56 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What do the labor and material for preparation for shipment 
amount to per ton of finished plate ?—A. As this is a detail of costs, I 
can not state, for the reason already given. 

Q. How are the total water, steam, power, transportation, inspec¬ 
tion, drafting, and laboratory charges reckoned?—A. As this is a 
detail of costs, I can not state, for the reason already given. 

Q. What were the total power charges for your plant last year— 
by power charges is meant electric power, steam power, water power, 
or producer gas for running engines, as the case may be—and how 
did you arrive at the method of assigning the various proportions to 
the various operations ?—A. As this is a detail of costs, I can not 
state, for the reason already given. 

Q. The same information is desired for the laboratory, drafting, 
inspection, and transportation charges.—A. As this is a detail of 
costs, I can not state, for the reason already given. 

Q. What is the cost per ton of Class A-2 shipped plates ?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. What is the cost per ton of Class B shipped plates?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. What was the average cost per ton of Class C steel armor?— 
A. Understanding that Class “C” covers bolts, nuts, etc., I would 
state that we do not manufacture this class. 

Q. What do you reckon your working capital to be?—A. We do 
not have a segregated working capital for this department of our 
business; but our estimate is that it requires about $1,200,000, 
operating as we have been in recent years. In this connection, it 
must be understood that the process for making heavy cemented 
armor covers a period of about eight months—from the making of 
the ingot to the shipping of the group; and, although the Govern¬ 
ment makes partial payments at various stages of the process, 10 
per cent of the price of the last group is withheld until six months 
after the last plate is placed on the vessel, provided that this final 
10 per cent shall not be withheld more than nine months after the 
shipment of the last plate. 

Q. What does the maintenance of your plant amount to per 
annum?—A. As this is a detail of costs, I can not state, for the 
reason already given. 

Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture, 
and separate from depreciation?—A. As this is a detail of costs, I 
can not state, for the reason already given. 

Q. What does this maintenance mean? To what is it applied?— 
A. As this is a detail of costs, I can not state, for the reason already 
given. 

Q. What is the total of proportional administration charges made 
to armor ? How has this been arrived at ?—A. As this is a detail of 
costs, I can not state, for the reason already given. 

Q. Give a tabulated list showing the various salaries paid, and how 
proportionately divided, so as to include the armor plant?—A. As 
this is a detail of costs, I can not state, for the reason already given. 

Q. How much did the insurance charges on your armor plant 
amount to?—A. This is also a detail of costs, but, as a matter of 
fact, we carry our own risks and figure a provision accordingly. 


ARMOR PLANT FOR THE UNITED STATES. 


57 


Q. How much taxes arc chargeable to the armor plant ?—A. This 
is also a detail of costs. We have to estimate the amount of taxes 
applicable to our armor plant because the local tax assessments are 
made in such a way that armor plant facilities are mixed up with 
other facilities at our Homestead Works. 

Q. How much do you charge to armor in behalf of the pension fund 
and liability fund?—A. This is also a detail of costs; but we do not 
charge anything for pensions. We only charge a provision, based on 
our experience, to take care of our liability on account of accidental 
injuries to employees—which comprehends not only compensation 
for partial or total disability, but also the payment of wages to and 
surgical and hospital care of the injured while off duty because of 
accidents. 

Q. How much depreciation is charged against the armor plant ?— 
A. Under our practice we do not charge depreciation as an item of 
our manufacturing costs. We provide for depreciation through our 
general profit and loss account, and this provision is made with refer¬ 
ence to all our plants and facilities as a whole, and not as to units or 
classes of equipment. Of course, when we come to estimate selling 
costs for any particular product we must approximate a fair rate of 
depreciation applicable thereto. 

Q. What is this depreciation, and how has it been arrived at ?—A. 
Having in mind the answer just made, I would state that we con¬ 
sider that our so-called selling costs for armor should include a charge 
for depreciation based on a rate of 6 per cent per annum on the cost 
of the plant and facilities, exclusive of cost of site, considering fully 
the character and risks of the business. 

Q. After a year’s operations, within which a certain sum of money 
has been set aside from the proceeds of the manufacture of armor 
for depreciation charge, what is done with this money?—A. As 
already stated, we do not set aside depreciation funds specifically on 
the armor plant. 

Q. After depreciation charge has been made to a year’s operation 
and there have been no replacements of tools, is this amount used to 
amortize the original investment ?—A. Depreciation funds in a going 
business like ours are used to replace worn-out facilities in kind or to 
ultimately return to stockholders exhausted investments. 

Q. Since the erection of your armor plant what has been the total 
amount of depreciation which has been charged into the cost of 
armor?—A. As already explained, we do not charge into our costs 
for depreciation. 

Q. How much, if any, of this sum of money has been actually used 
for the installation of new machinery in place of old, for building new 
buildings, furnaces, etc., in place of old, and has this expenditure been 
added to the capital account ?—A. I can not tell just how much has 
been charged off to general depreciation funds which have been pro¬ 
vided for all property, for renewals and replacements of the armor 
plant. The armor plant was owned and operated, up to 1900, by the 
old Carnegie partnerships, i. e., Carnegie, Phipps & Co. (Ltd.), to 
July 1, 1892, and then by the Carnegie Steel Co. (Ltd.), whose books 
of account are not in our present corporation’s possession. I do 
know, however, that none of these expenditures for renewals and 
replacements have been added to capital account. 


58 


ARMOR PLANT FOR THE UNITED STATES. 


Q. The remainder of this sum of money which has not been ex¬ 
pended, has it been used for amortizing any of the original invest¬ 
ment?—A. Any unexpended allowances made for general deprecia¬ 
tion for all property have not, as yet, been used for amortizing any of 
the original investment. But we claim that good business principles 
and practices permit us, when estimating our selling costs, to include 
therein always the recognized fair rate of depreciation applicable to 
such plants, so long as we maintain our plant efficiently and suffi¬ 
ciently, without regard to any amounts which may or may not have 
been set aside from profits or otherwise for amortization. 

Q. How much money is invested in your armor plant ?—A. In the 
armor plant and auxiliary departments required and used for 
armor making, there has been invested, up to October 31, 1914, 
$6,125,846.44, including a value of $450,000 for 30 acres of land. 

Q. Does this represent the total amount which has been expended 
for this plant, inclusive of all depreciation replacements?—A. It 
does not include cost of any replacements, so far as I can determine 
from records now available. 

Q. In reckoning your profit, is it reckoned as a profit on the total 
amount of money which has been put into the armor plant, or on the 
amount which has been put into the armor plant less all depreciation 
which has not been used for the purpose of replacement?—A. We do 
not calculate our profits in this manner. Differences between selling 
price, proceeds, and shop or manufacturing costs are carried to credit 
of our general profit and loss account, and all overhead expenses and 
taxes and general depreciation, etc., are charged to general profit and 
loss. 

WEDNESDAY, NOVEMBER 25, 1915. 

Special Committee, 

South Bethlehem , Pa. 

The committee met at 2.15 p. m. at the office of the Bethlehem 
Steel Co., Hon. B. R. Tillman (chairman) presiding. 

Present: Hon. L. P. Padgett, Member of Congress, Rear Admiral 
J. Strauss, United States Navy, members of the committee. Lieut. 
Commander C. C. Bloch, United States Navy, Mr. J. B. Knight, and 
Mr. E. S. Theall, assistants to the committee. 

There were also present Mr. E. G. Grace, president of the Bethlehem 
Steel Co., Mr. W. F. Roberts, general superintendent of the Lehigh 
plant of the Bethlehem Steel Co., Mr. F. A. Shick, comptroller and 
auditor of the Bethlehem Steel Co. 

The Chairman. The committee prepared before we left Washing¬ 
ton, considering all the phases of the manufacture of armor and in 
pursuance of instructions in the law, a list of questions which Admiral 
Strauss will propound to you as he did to Mr. Dinkey, president of 
the Carnegie Steel Co. 

STATEMENT OF MR. E. G. GRACE, PRESIDENT OF THE BETH¬ 
LEHEM STEEL CO. 

Mr. E. G. Grace, having been duly sworn, testified as follows: 

The Chairman. What is your name, and what connection do you 
have with this company ? 

Mr. Grace. E. G. Grace, president of the company. 


ARMOR PLANT FOR THE UNITED STATES. 


59 


The Chairman. President of the Bethlehem Steel Co.? 

Mr. Grace. Yes, sir; president of the Bethlehem Steel Co. 

Q. How much does it cost your company to produce a ton of 
K. C. armor, f. o. b., Class A-l armor, including material, labor, 
and shop overhead charges?—A. We would prefer not to answer. 
We consider the cost of armor as confidential information, and the 
character of information which we would not want to make available 
for our competitors. We believe that we have developed processes 
in our method of manufacturing armor which are unique and unusual, 
and not known to our competitors. Such conditions are naturally 
reflected in costs, and are the development of our many years of 
experience in the manufacture of armor, and constitute a very valu¬ 
able asset as stock in trade. We understand the object of your 
investigation to be to obtain information relative to armor-plate plant 
and armor-plate manufacture, to the end of the possible building and 
operating of an armor-plate plant by the United States Government. 
In the event of this coming to pass, we would look upon the United 
States Government as a more serious competitor than the ordinary 
competitor, on account of its position of controlling the purchases 
of armor. We must also bear in mind that we are at all times 
subject to foreign competition, operating under widely different con¬ 
ditions than confront us in this country. Unquestionably, informa¬ 
tion of the character requested in the above question would place 
our present and possible future competitors in a position of decided 
advantage over us. 

Q. Has this cost been reached by taking the annual output of a 
single year, or of a term of years, and making allowance for rejec¬ 
tions and ballistic failures?—A. Same as to first question. 

Q. What are the various components of this cost per ton?—A. 
Same as to first question. 

Q. What is the cost per ton of the armor ingot at the forge, including 
all rejections?—A. Same as to first question. 

Q. Give the components, with their unit prices, that enter into a 
furnace charge for an armor heat.^—A. Same as to first question. 

Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat?—A. Same as to first question. 

Q. How much does this amount to per ton of armor ingot pro¬ 
duced?—A. Same as to first question. 

Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot?—A. Same as to first question. 

Q. What is the fuel charge for each ton of ingot ?—A. Same as to 
first question. 

Q. What is the proportional laboratory, superintendence charge 
for each ton of ingot?—A. Same as to first question. 

Q. What is the lifting, stripping, and chipping charge per ton of 
ingot?—A. Same as to first question. 

Q. What is the power charge, including steam, electric, and wa er, 
for each ton of ingot?—A. Same as to first question. 

Q. What is the cost for forging?—A. Same as to first question. 

Q. What scrap allowance is made for condemned ingots ?—A. Same 
as to first question. 

Q. How many tons of armor ingots did your company manufac¬ 
ture last year?—A. Eighteen thousand and ninety-four and thirty- 
seven one-hundredths tons. 


60 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What was the total number of these ingots in tonnage which 
were rejected before reaching the forge ? What was the total number 
of tons rejected before coming to the forge ?—A. Same as first question. 

Q. How many tons of ingots were forged during the past year ?— 
A. Eighteen thousand and fourteen and forty-five one-hundredths. 

Q. How many tons were rejected during the forging?—A. Same 
as to first question. 

Q. What scrap allowance was made for these rejected during 
forging ?—A. Same as to first question. 

Q. What was the oxidization and scale loss at the forge?—A. 
Same as to first question. 

Q. What did the labor for forging each ton of ingot amount to ?— 
A. Same as to first question. 

Q. What did the fuel for each ton of ingot forged amount to ?—A. 
Same as to first question. 

Q. What did the repairs to heating furnaces amount to for each 
ton of armor?—A. Same as to first question. 

Q. What did the electric power, light, steam, water, drafting, 
transportation, and inspection per ton of plate amount to during the 
forging?—A. Same as answer to first question. 

Q. Of all the ingots forged and not rejected, what percentage was 
discarded—how many tons?—A. We will attempt to give you on 
the approximate yield of finished plate from the ingot. I think that 
is the way we can get it. 

The Chairman. You mean the percentage of armor plate shipped 
and delivered to the Government, or delivered to the Government 
and the material you started out with ? 

Mr. Grace. This phrase would cover it with us: The percentage of 
yield of shippable material in our armor-plate practice. We would 
be glad to give you the average of that. It varies considerably. 

The Chairman. Will you give us the total you start with? 

Mr. Grace. We will give you the yield of good armor plate from 
the ingot. 

The Chairman. Will you give us the weight of the ingot you start 
with ? 

Mr. Grace. Yes; the weight of the ingot. I will give you the per¬ 
centage of yield of good armor plates from those ingots. For instance, 
if we had 8,000 tons of ingots cast last year, I will give you the per¬ 
centage of shippable armor, approximately, out of those ingots—40, 
42, or 43 per cent, whatever it may be. [Later.] Our yield of 
shippable armor for 1913 was about 41 per cent. 

Admiral Strauss. What allowance is made for the metal thus 
discarded ? 

A. Same as to first question. 

Q. What is the unit price per ton of plate when ready for car¬ 
bonizing ?—A. Same as to first question. 

Q. How many tons of armor plate were carbonized at the works of 
your company last year?—A. Twelve thousand four hundred and 
thirty-four and seventy-one-hundredths tons. 

Q. What was the oxidization and scale in this treatment, in tons ?— 
A. Same as to first question. 

Q. What was the total number of plates rejected during carboniza¬ 
tion?—A. Same as to first question. 


ARMOR PLANT FOR THE UNITED STATES. 61 

Q. What does the labor per ton of carbonized plate amount to?— 
A. Same as to first question. 

Q. What does the material per ton of carbonized plate amount to ?— 
A. Same as to first question. 

Q. How much fuel per ton of plate is used in carbonizing ?—A. 
Same as to first question. 

Q. How much did the furnace repairs per ton of carbonized plate 
amount to ?—A. Same as to first question. 

Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, transportation, amount to 
per ton of carbonized plate ?—A. Same as to first question. 

Q. How much is the carbonized plate worth per ton, without 
machining ?—A. Same as to first question. 

Q. How many tons of armor plate were reforged by your company 
during the past year ?—A. Nine thousand seven hundred and sixty- 
five and four one-hundredths tons. 

Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
working the cost of armor?—A. Same as to first question. 

Q. What does the labor per ton for reforging amount to ?—A. Same 
as to first question. 

Q. What do the repairs per ton for reforging amount to ?—A. Same 
as to first question. 

Q. What does the fuel per ton for reforging amount to ?—A. Same 
as to first question. 

Q. What is the proportional amount of power—electric, steam, 
water—for reforging ?—A. Same as to first question. 

Q. What does the proportional drafting, inspection, transporta¬ 
tion, and laboratory for reforging amount to?—A. Same as to first 
question. 

Q. How much discard is made after reforging ?—A. About 25 to 30 
per cent. 

Q. What allowance is made for this discard in reckoning the cost ?— 
A. Same as to first question. 

Q. What is the cost of armor per ton after reforging ?—A. Same 
as to first question. 

Q. How many tons of armor plate were sent to treatment by your 
company during the past year?—A. You mean by that all kinds of 
treatment ? 

Admiral Strauss. Treatments of armor; that would not include 
you first treatment of the ingot. 

A. Twelve thousand four hundred and thirty-four and seventy-one 
hundredths tons. 

Q. How many tons were lost during treatment by rejection?— 
A. Same as to first question. 

Q. What does the labor per ton of treated plate amount to ?—A. 
Same as to first question. 

Q. What does the material per ton of treated plate amount to ?— 
A. Same as to first question. 

Q. What do the repairs per ton of treated plate amount to?— 
A. Same as to first question. 

Q. What do the proportional charges per ton of treated plate 
amount to?—A. Same as to first question. 


62 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What is the total cost per ton of treated and rectified plate?— 
A. Same as to first question. 

Q. How many tons of armor plate were sent to machining by your 
company last year ?—A. Same as to first question. 

Q. How many tons of machined plate were produced last year?— 
A. Seven thousand two hundred and sixty-nine and twenty-two 
hundredths tons. 

Q. Were there any rejections during the process of machining? If 
so, how many tons and what allowance was made for the rejected 
material in reckoning the final cost ?—A. Same as to first question. 

Q. How much per ton does the labor of machining amount to ?— 
A. Same as to first question. 

Q. How much does the machined scrap amount to ?—A. The cost 
of the machined scrap, or the weight? 

Admiral Strauss. The weight. 

A. Same as to first question. 

Q. How much does the material for machining amount to, includ¬ 
ing oil, waste, repairing of tools, supply of tools?—A. Same as to 
first question. 

Q. How much do the repairs per ton of machined plate amount 
to during the machining operation?—A. Same as to first question. 

Q. What do the proportional charges per ton of machined plate 
amount to ?—A. Same as to first question. 

Q. What is the cost per ton of machined plate produced, ready for 
shipping, but not f. o. b. and jacked up?—A. Same as to first ques-' 
tion. 

Q. How many tons of machined plate were presented by your 
company for shipment last year?—A. Seven thousand two hundred 
and seventy-seven and twenty-nine one-hundredths tons. 

Q. What do the labor and material for preparation for shipment 
amount to per ton of finished plate?—A. Same as to first question. 

Q. How are the total water, steam, power, transportation, inspec¬ 
tion, drafting, and laboratory charges reckoned?—A. We will 
supply that as to method. [Later.] The cost of each of these items 
is kept as to total, and is distributed to cost of armor plate on the 
basis of service rendered. 

Q. What were the total power charges for your plant last year? 
By power charges is meant electric power, steam power, water power, 
or producer gas for running engines, as the case may be. And how 
did you arrive at the method of assigning the various proportions to 
the various operations ?—A. Same as to first question. 

Q. The same information is desired for the laboratory, drafting, 
inspection, and transportation charges.—A. Same as to first ques¬ 
tion. 

Q. What is the cost per ton of class A-2 shipped plate?—A. Same 
as to first question. 

Q. What is the cost per ton of class B shipped plate?—A. Same as 
to first question. 

Q. What is the average cost per ton of class C steel armor?—A. 
Same as to first question. 

Q. What do you reckon your working capital to be?—A. We have 
no definite working capital against any one of our particular products, 
but would estimate the amount of working capital required for the 
manufacture of armor, to be $500,000, including its inventories. 


ARMOR PLANT FOR THE UNITED STATES. 


63 


Q. What does the maintenance of your plant amount to per annum; 
that is, the armor plant and all that belongs to the production of 
armor?—A. Same as to first question. 

Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture 
and separate from depreciation?—A. Same as to first question. 

Q. What is the total of proportional administration charges made 
to armor; how has this been arrived at?—A. We make no division. 

Q. Give a tabulated list showing the various salaries paid, and how 
proportionally divided, so as to include the armor plant.—A. We 
haven’t such a thing. 

Q. How much did the insurance charges on the armor plant amount 
to?—A. We make no attempt to distribute them. 

Mr. Padgett. Referring to the question before the last, with refer¬ 
ence to the statement of salaries paid to those engaged in the manu¬ 
facture of armor. You say you have no list? 

Mr. Grace. I must have misunderstood the question. We have 
no division of the salaries as against armor. 

Admiral Strauss. The question was, “Give a tabulated list show¬ 
ing the various salaries paid, and how proportionally divided, so as to 
include the armor plant.” 

Mr. Grace. We would want to say “no” to that. 

Mr. Padgett. That was the reason I asked the question, because 
it occurred to me that it could be taken both ways. 

Q. How much taxes are chargeable to the armor plant?—A. We 
make no division of that. 

Q. How much do you charge to armor in behalf of the pension fund 
and liability fund ?—A. No direct charge against any of the products 
of the works. 

Mr. Padgett. I would like to ask a question right there. In fixing 
the selling price of armor do you put that in as one of the elements of 
cost? 

Mr. Grace. We would put it in; yes. 

Mr. Padgett. Would you state what you put in for that ? 

Mr. Grace. No; we would not want to tell that, because it is a 
part of the cost of armor. 

Mr. Padgett. Yes; I understand. 

Mr. Grace. In an estimated way. 

Mr. Padgett. You mean you do not keep it in your books, but you 
put it in as one of the component elements in fixing the price ? 

Mr. Grace. In arriving at the selling price, naturally, just the 
same as we would do on any other of our products. We reflect in our 
own way an estimated amount for the overhead of that particular 
product. We would not want to give that information on armor. 

Q. How much depreciation is charged against the armor plant?— 
A. None, direct. 

Mr. Padgett. Just on that point. In fixing the selling price you 
put that in as one of the elements—the depreciation of your plant— 
in fixing the selling price ? 

Mr. Grace. We reflect in our price an estimated amount, or our 
own idea of the amount, overhead charges, local taxes, insurance, and 
all those things which are not carried directly against any one prod¬ 
uct, but which we use our own judgment in distributing. 

Mr. Padgett. And you do distribute them in fixing the price ? 


64 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Grace. In our mind we have a certain idea of what that would 
be but it does not show in our books anywhere. 

Mr. Padgett. Now, as to what that proportional part is, you de¬ 
cline to answer? 

Mr. Grace. Yes; I would not want to say. 

Q. After a year’s operations within which a certain sum of money 
has been set aside from the proceeds of the manufacture of armor for 
depreciation charge, what is done with this money?—A. There is 
really no money set aside. It is a matter of a book entry. 

Mr. Padgett. What do you do with that book entry to counter¬ 
balance ? 

Mr. Grace. I will refer that question to the auditor. 

Q. After depreciation charge has been made to a year’s operation, 
and there have been no replacements of tools, is this amount used to 
amortize the original investment?—A. We will endeavor to give our 
method of handling our overhead and depreciation charges when we 
get your direct questions. I think that will make it simpler for you 
because we have no objection to explaining our method of handling 
our accounts. [Later.] Our general administrative and selling 
expenses are charged monthly to our general profit-and-loss account 
and are not distributed against any individual products. The matter 
of depreciation is decided at the end of our fiscal year, and a lump 
sum is set aside to cover depreciation and obsolescence on our entire 
properties. 

Q. Since the erection of your armor plant, what has been the total 
amount of depreciation which has been charged into the cost of 
armor?—A. That, of course, we do not have. We have never dis¬ 
tributed that way. 

The Chairman. What have you spent for repairs to your plant for 
manufacturing armor since I was here ? 

Mr. Grace. That I would not know. 

The Chairman. You pointed out where you had rebuilt entirely a 
good part of it. 

Mr. Grace. Yes; but there are certain items which you would call 
repairs and extensions to plant which were not legitimate repairs. 

The Chairman. Would you mind supplying the Government an 
estimate of an up-to-date armor plant ? 

Mr. Grace. I would not want to do that; but I would be entirely 
willing to state in a general way what I think an armor plant could 
be built for, for the Urn ted States. 

The Chairman Will you state that now ? 

Mr. Grace. I think $1,000,000 for 1,000 tons of output. My judg¬ 
ment would be that a 10,000-tort plant would cost approximately 
$ 10 , 000 , 000 . 

The Chairman. And would that mean that a 20,000-ton plant 
would cost $20,000,000 ? 

Mr. Grace. No. That is the reason I stated cost for a plant of 
10,000 tons capacity as a basis, for in creating a larger plant there 
would be many items which would not have to be duplicated for the 
increased capacity. 

Admiral Strauss. What is the capacity of your plant? 

Mr. Grace. From 10,000 to 12,000 tons a year, on the present 
character of armor. 


ARMOR PLANT FOR THE UNITED STATES. 


65 


Admiral Strauss. How much money do you estimate, if you care 
to answer that question, that you have invested in your plant exclu¬ 
sive of the site ? 

Mr. Grace. In the neighborhood of $7,100,000. 

Admiral Strauss. Why, then, would it cost the Government 
$12,000,000 to duplicate your plant? 

Mr. Grace. To begin with, our plant is built at cost; there is no 
profit in it. Our plant has been, in the main, created by ourselves 
and built at our cost, which you could not duplicate in a contracting 
proposition. If our plant has cost us over $7,000,000, you would not 
have to add much of a contractor’s profit, which they would insist on 
having from the Government, to bring it up to $10,000,000 or 
$12,000,000. 

The Chairman. Would you mind indicating whereabouts in the 
United States you think would be the best place for the Government 
to construct a plant ? 

Mr. Grace. Bethlehem. 

The Chairman. You want your rival right at home? 

Mr. Grace. We want him where we can watch him. 

The Chairman. Would you mind stating why? 

Mr. Grace. Good labor conditions, and the Bethlehem Steel Co. 
would furnish you your pig iron very cheaply. 

The Chairman. In other words, you want a customer as well as a 
competitor? 

Mr. Grace. We want a customer as well as a competitor. Speak¬ 
ing seriously, now, we believe that this territory—Bethlehem, Phila¬ 
delphia—is very well located for a steel industry, and your shipyards 
are primarily on the eastern coast, where the armor will be consumed. 

Mr. Padgett. You speak of this section; do you include Phila¬ 
delphia in the Bethlehem region ? 

Mr. Grace. Yes. If you ask me personally, I should say Bethle¬ 
hem, but Philadelphia is a good location for any geographical reasons 
that one could give. I think, maybe, our labor conditions are possibly 
better than at Philadelphia, but outside of Philadelphia you get 
possibly as good labor conditions as you get here. I certainly think 
you want your armor plant, if you build one, in the East, where you 
can assemble your raw materials cheaply and where you will have 
your shipyards, your consumers, near at hand. 

The Chairman. Would you mind telling the committee what 
salaries these gentlemen in here are receiving, including yourself ? 

Mr. Grace. I would not want to tell you that. 

The Chairman. Would you mind telling the committee what your 
foremen of the shops receive ? 

Mr. Grace. I would not want to give you that information because 
it has a direct bearing on labor conditions and on resulting costs; 
and it would be a difficult matter for me to suppiv it in any event, for 
the reason that our men are paid a nominal salary and participate 
in the profits. Every man you are talking to here has a certain salary 
and participation in the profits of the company, so your salary list 
would not be representative. 

The Chairman. How many graduates of the Naval Academy or 
ex-naval officers have you in your employ ? 

83344—H. Doc. 1620, 63—3——5 


66 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Grace. We will be glad to supply that, and I hope to get some 
more. [Later.] We have 11 United States naval graduates and 
ex-officers in our employ. 

The Chairman. All that I have ever seen are very fine gentlemen. 

Mr. Grace. They are very fine gentlemen. I will also supply 3 r ou 
the number from West Point, if you like. [Later.] We have one 
United States Army graduate and three ex-officers in our employ. 

Q. Plow much money is invested in your armor plant?—A. Ap¬ 
proximately $7,100,000. 

The Chairman. And you think you have a fine one? 

Mr. Grace. We have a pretty good plant; it needs some improve' 
ments to it. I pointed out to you when we went through the shops 
where we have to make a large expenditure to increase our bending 
facilities. We are not ashamed of our plant as compared with our 
competitors, nor of its product, either. 

The Chairman. You are not boasting, you are just conscious of 
your own worth and do not mind claiming it ? 

Mr. Grace. I will take every opportunity to advertise it. 

Q. Does that sum include the cost of the land?—A. No. 

Q. Does this represent the total amount which has been expended 
for this plant, inclusive of all depreciation replacements?—A. We 
have no absolute book records of the total investment in armor-plate 
plant. First, because many of our records showing the detail cost 
of various items were destroyed in the office fire in 1906; and second, 
because in a plant like ours, where an armor plate plant is one of the 
departments served by auxiliary departments, such as transportation, 
electric stations, and the like it is necessary to divide on our best 
possible judgment and distribute on our best possible judgment the 
investment in such auxiliary departments. With the reserves that 
the statement is based on our best possible judgment we consider the 
investment in our armor plate plant (exclusive of working capital an 
inventories) to be $7,128,705, which represents the value only of 
land, buildings, machinery, and equipment which are now actually 
m the plant and in operation and does not include the value of any 
machinery or equipment which has been scrapped or dismantled. 

Q. In reckoning your profit, is it reckoned as a profit on the total 
amount of money which has been put into the armor plant or on the 
amount which has been put into the armor plant less all depreciation 
which has not been used for the purpose of replacement?—A. No, 
we make no division of our total profits. 

The Chairman. Have you ever figured out the relative expense 
connected with the armor factory and the general plant? 

Mr. Grace. We have estimated what the value of our armor plant 
is, in figuring the price of armor—what we should get as being the 
right price for it. We have made our own estimate in arriving at 
the price which we asked for armor, but in our accounting we do 
not have such a thing, because we have a general expense for all 
the parts of the company. 

Q. How many acres are now occupied by your plant ?—A. Find 
it impossible to give accurate answer to this question on account of 
our auxiliary departments serving generally other departments as 
well as the armor-plate department. 


ARMOR PLANT FOR THE UNITED STATES. 


67 


Mr. Padgett. Just a moment, please, before we get away from 
that. In 1906 the figures furnished by the Bethlehem Steel Co. to 
the committee that was investigating the matter was $5,625,000 
for armor plant alone. That appears in House Document No. 193, 
Fifty-ninth Congress, second session, on page 30. And I was going 
to ask you to state, when you made your answer, the items that 
you have added since 1906 to run it up to $7,100,000. 

Mr. Grace. In other words, we will see if we can connect this 
statement with our present situation. That is what you want. 
We will see if we can coincide those two dates. Whether we can 
or not I am not sure, but I think we can. But whatever we supply 
will be, from the best of our knowledge, correct as shown on our 
books to-day. We will give you from our records the amount of 
money which we have at this date invested in the armor-plate plant. 
That, after all, seems to me is what you want, and that would be 
better even than mere hearsay of this character. 

Admiral Strauss. I would just like to go back to that question—I 
do not know whether Mr. Grace said he would tell us or not—and that 
is, how he arrives at the cost; what method he employs in arriving at 
a proper selling price for the armor. 

Mr. Grace. I could only cover that in a broad statement of this 
kind, that we estimate our costs, including what we would consider 
in our judgment belongs to the armor-plate department. We would 
arrive at an estimated cost of output upon which we would base our 
judgment for selling price, but that would absolutely have to be an 
estimation. 

The Chairman. What percentage of your business is the manufac¬ 
ture of armor? 

Mr. Grace. Well, Senator, that varies so much with the amount of 
work which is given to us by the Navy Department. For instance, 
the last two or three years we have had armor-plate contracts amount¬ 
ing to 2,500 or 2,600 tons of armor a year. We have had 5,000-ton 
contracts; we have had 8,000-ton contracts. So it varies absolutely 
with each year. 

The Chairman. Well, what I was arriving at was this: What divi¬ 
dend did the company pay ? 

Mr. Grace. There is no objection to stating that. We are paying 
5 per cent on the preferred stock. 

The Chairman. What is the capital stock ? 

Mr. Grace. Thirty millions—fifteen millions preferred and fifteen 
millions common stock. From 1907 to 1912, inclusive, we paid no 
dividends. In 1913 and 1914 we paid 5 per cent on the preferred 
stock. We have never paid any dividend on the common. 

The Chairman. What did you say the capital was ? 

Mr. Grace. Thirty million—fifteen million preferred and fifteen 
million common. 

Mr. Padgett. You stated that last year the price of armor was $440 
a ton, I believe ? 

Mr. Grace. That was our contract for the last year’s armor—for 
the base, class A-l armor. 

Mr. Padgett. This year the contract is $425, isn’t it? 


68 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Grace. That is the contract price for that same class of armor. 

Mr. Padgett. Now, last year you had a contract for about how 
many tons of armor ? 

Mr. Grace. Twentv-six hundred tons from the United States Gov¬ 
ernment. 

Mr. Padgett. Now, this year you have a contract for how much? 

Mr. Grace. For 16,000 tons. 

Mr. Padgett. A little over 16,000 tons ? 

Mr. Grace. Between 16,000 and 17,000. 

The Chairman. If your capacity is only 12,000 tons you will have 
to get some help to make 16,000 tons. 

Mr. Grace. To meet the conditions of delivery required by the 
specifications we will have to get help. 

Mr. Padgett. I will ask you if the reduction of SI5 per ton is a 
sufficient reduction and a reasonable reduction in the price, consider¬ 
ing that last year you had 2,500 tons and this year you have got 
16,000 tons, or more than enough to run at your full capacity - and 
I ask that in view of the statement that was made by Mr. Schwab 
in 1897 when he said: (l l am prepared to say that if you will give us 
3,000 tons of armor per year, as estimated, we will give you a rebate 
of $50 per ton for every ton over that quantity. If you will give us 

3.500 tons of armor per year we will give you a rebate of $100 per 
ton for every ton over that quantity/’ That is what Mr. Schwab 
stated. Now, do you think that $15 was a fair and a reasonable 
reduction or rebate on the quantity between 2,500 tons awarded 
under the contract last year and 16,000 tons this year? 

Mr. Grace. Irrespective of Mr. Schwab’s comments there, which 
] understand are not put in your direct question to me- 

Mr. Padgett (interposing). I am putting it as a basis. 

Mr. Grace. Of course, I would not comment on Mr. Schwab’s 
statement. Conditions were very different. He was speaking for the 
Carnegie Steel Co. and not the Bethlehem Steel Co., but if you want 
me to answer your question whether or not $15 represented a proper 
reduction on account of tonnage between the price of 1913 and the 
price of 1914, and that is the real question from your standpoint, I 
will do so. As conditions are to-day, Mr. Padgett, I could not com¬ 
ment on Mr. Schwab’s statement because I do not know his condi¬ 
tions. He was talking for the Carnegie Steel Co., then. 

Mr. Padgett. What I am trying to get at is this: If for 3,500 tons 
he would reduce it $100 a ton over that amount, when you run from 

2.500 tons up to 16,000 tons, can not the Bethlehem Co. reasonably 
afford to reduce it more than $15 a ton? 

Mr. Grace. If you will ask me the question I am ready to answer 
it from our standpoint as to comparative prices, but I could not, 
naturally, connect it with that statement of which I know nothing. 

Mr. Padgett. I will put the question in this way: Leaving out the 
statement of Mr. Schwab, and saying that if you had a contract last 
year for 2,500 tons at $440 per ton, and this year you are given 
16,000 tons, bearing in mind that one is a small quantity and the 
other is a very large quantity, could you not afford to make a reduc¬ 
tion of more than $15 per ton? 

Mr. Grace. Not below the price of $440, because $440 was not a 
sufficient price for 2,500 or 2,600 tons of armor. 



ARMOR PLANT FOR THE UNITED STATES. 


69 


Mr. Padgett. Mr. Schwab was then getting $500 or $600 per ton? 
Mr. Grace. I imagine he was. 

Mr. Padgett. The price was $500, I believe? 

Lieut. Commander Bloch. In 1896 it was $550; in 1898 it was $400. 
Mr. Grace. Mr. Padgett, you are going on the assumption that $440 
was a proper and a fair price for a small tonnage of armor. This com- 

E can not make 2,500 tons of armor a year for $440 a ton without 
g money. I am willing to state that. 

Mr. Padgett. You mean that it costs $440 a ton to make armor? 
Mr. Grace. Our company with its investment to-day in its armor- 
plate plant could not tahe and run our plant at $440 a ton and make 
money. We would lose money if we did. 

Mr. Padgett. With your other business? 

Mr. Grace. I am talking about the armor. 

Mr. Padgett. But if you had some foreign business? 

Mr. Grace. The United States is our only sure customer. What 
we have been able to get in the foreign trade has only been within a 
couple of years, and that has been a fortune of war. 

The Chairman. Did you say that you could not afford to make 
armor at $440 a ton ? 

Mr. Grace. No; I did not mean that. We can not make 2,500 
tons of armor with our present armor plate capacity and make any 
return on our plant as profit; we would show a loss on the basis of 
$440 a ton. 

The Chairman. Your capacity is about 12,000 ton? 

Mr. Grace. But we only got an order for 2,500 tons from the 
United-States Government last year. 

The Chairman. Whose fault was it that you got no more last year? 
Mr. Grace. We could not get it. The Secretary wouldn’t give 
it to us, I suppose. 

I am just showing that we can not make a reduction along the lines 
of Mr. Padgett’s suggestion because $440 is not the proper basis to 
start with; it is not correct; it is not a proper selling price for this 
tonnage of armor. 

Admiral Strauss. Would you consider the orders of the United 
States Government, as supplemented by the Army and foreign 
Governments, as being a sufficient basis to reckon your selling price 
of armor, and would you consider that in fixing your selling price ? 

Mr. Grace. It would add nothing tangible to add our foreign 
business. 

The Chairman. Suppose you had a contract for 12,000 or 15,000 
tons a year. 

Mr. Grace. We are willing to talk that any time. Then we 
would have assurance of continuous operations, and could plan 
accordingly. 

The Chairman. Give us a basis for the talk. 

Mr. Grace. If there' is any committee created or given power by 
Congress to negotiate with the Bethlehem Steel Co. to fill its plant 
for armor for the next 10 years, we will talk and talk definitely. 

The Chairman. And you will see that the Government does not 
build its own plant ? 

Mr. Grace. We will be entirely willing to make prices lower for a 
capacity of 10 years in our plant than we can afford to make to-day. 
There would be no use of my saying so if it wasn’t true. 


70 


ARMOR PLANT FOR THE UNITED STATES. 


The Chairman. How much lower? 

Mr. Grace. I would have to figure. 

The Chairman. Will you figure on it and answer later? 

Mr. Grace. If we are put in touch with the proper authorities, with 
the understanding that they will make such a negotiation, yes, wo 
would be glad to go into it. If the United States Government would 
come to us as a customer and will give us a contract for 100,000 tons 
of armor, to be delivered in the next 10 years, we will give you better 
prices and be very glad to negotiate it. 

Admiral Strauss. And would the price under those conditions 
be substantially lower than the present price ? 

Mr. Grace. Yes; it would be, because we would have an assured 
business. 

The Chairman. Are you willing to state to the committee how 
much? 

Mr. Grace. I would not. 

The Chairman. After you figure? 

Mr. Grace. No; unless the power is invested in some one to con¬ 
duct such negotiations, and conclude contract if satisfactory basis 
can be reached. That would be like sending the president of a com¬ 
pany to negotiate with an office boy who could not close the transac¬ 
tion whether he wanted to or not. But if you will empower the Chief 
of the Bureau of Ordnance, if the Secretary of the Navy will give 
him that power, we will then see if we can not close a contract with 
him on a satisfactory basis. The Secretary doesn’t have to close if he 
doesn’t get a satisfactory price, but you have Congress empower the 
Secretary of the Navy to contract with the Bethlehem Steel’ Co. for 
100,000 tons of armor, to be delivered in 10 years, and we would be 
glad to negotiate with the Secretary of the Navy to see if we can not 
satisfy him on price. We manifestly could afford to make armor at a 
less figure under those conditions. That is assured business; it isn’t 
a gamble like it is to-day. This is the first real armor-plate order we 
have had for some time, the one we are getting this year. We have 
the same conditions in our gun manufacture, where we have installed 
this big plant which we have had no work for; Congress hasn’t appro¬ 
priated for it, and the Government has its own big gun shops. We 
are in the same identical position with reference to our gun plant, 
and we have sought other fields, and we have been, in a measure, 
successful. This year is the first year we have gotten a really sizeable 
order in either guns or armor from the Navy Department for some 
time. 

Mr. Padgett. Are there any other questions ? 

The Chairman. Mr. Grace, have you ever read up on the records 
of the company the origin of the manufacture of armor at Bethlehem ? 

Mr. Grace. Yes; I am familiar with it in a general way. Nat¬ 
urally, I would be expected to be. 

The Chairman. When was that first contract ? 

Mr. Grace. We started manufacturing armor in 1891. That was 
when we made our first armor. And we have made an average of 
about 4,500 tons of armor a year for the period of 22 years. That 
includes everythingwe have made. 

The Chairman. Do you know the amount of the first contract ? 

Mr. Grace. No; I do not remember. If it is of interest to you 
we can give it to you. 


ARMOR PLANT FOR THE UNITED STATES. 


71 


The Chairman. It is of interest. I am under the impression— 
I could prove it if I had the documents—that for the first contract 
with Bethlehem the price agreed on included the estimated cost of 
the improvements to your works —that is, to your works here—as a 
general ironworks in order to make armor at all. 

Mr. Grace. Well, I do not know enough about it for that. 

The Chairman. There was no place in the United States that could 
make armor at all—that was equipped to make it. The Secretary of 
the Navy, in looking around, picked out Bethlehem as the most 
likely company to engage in the making of armor, and after talking 
it over the Secretary induced the superintendent or the manager at 
that time to enter upon the construction or the manufacture of 
armor plate, and they agreed on a price. The price included the 
cost of the betterments to your plant that were necessary to enable 
them to make armor. \ 

Mr. Grace. I could not say yes or no to that. 

The Chairman. Are there any records that will show it? 

Mr. Grace. No; because the records of our company were de¬ 
stroyed in 1906, except just a few of our records. But you take our 
situation and history to-day and that would be impossible; that is, 
the investment which I know of personally and the extensions made 
to our plant could not have been reflected in our selling • price of 
armor. You take the selling price, just for quick figuring, at $400 
a ton of armor. One year we have been getting no armor, but last 
year we got 2,500 tons. This, at $400, just for multiplying quickly, 
would be $1,000,000. The total value of the contract selling price 
would be about 15 per cent on our investment of $7,000,000; nothing 
for depreciation or anything else, if it were all profit. 

The Chairman. Well, as the records were burned, it isn’t worth 
while to talk about it. 

Mr. Grace. It seems to me that you would have it in your own 
files in Washington if such an understanding existed. Your depart¬ 
ment in Washington would have it. Your correspondence in the 
Navy Department would show it. I know that at one particular 
time we were asked to double our capacity of plant. That is in more 
recent years and was during Mr. Roosevelt’s presidency, at the time 
when he started on his new naval program. We were practically 
commanded, or requested, to double the capacity of the plant at that 
time. 

The Chairman. Digging down in my memory for some other 
ancient history, I recall very distinctly that the Carnegie Co. were 
induced by a subsequent Secretary, or the next Secretary of the Navy, 
to enter into the manufacture of armor plate, too, because the Gov¬ 
ernment felt that it would be better to have two competing companies 
than to be subject to the exactions of one; there was a monopoly. 
Therefore, contracts were given to Mr. Carnegie—the Carnegie Steel 
Works—for armor. 

Mr. Grace. Yes; Bethlehem was in before Carnegie started. 

The Chairman. And then, instead of competition, we believe (and 
when I say “we,” I mean, of course, the Government) there was 
combination. And that combination held the Government up and 
exacted whatever price it saw fit until the Midvale Steel Co. came 
forward and made its bids, which were very much lower than either 
Carnegie’s or Bethlehem’s. 


■72 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Grace. And then they raised their price. 

The Chairman. Bless God, all three of you have combined now. 

Mr. Grace. They raised their price because experience showed to 
them, after they got into the business, that they could not afford to 
sell at the price they started at; no question about that. We have no 
agreements with Carnegie or Midvale to maintain the price of armor, 
or we wouldn’t sign the affidavit that we sign with every contract. 

The Chairman. You have no understanding, implied or expressed, 
verbal or written ? 

Mr. Grace. We have no agreement with anybody as to the price 
of armor; it is nobody’s business except the Bethlehem Steel Co.’s. 
We have nobody to answer to or for. No question about that. You 
remember as well as I do that at one time, after an investigation, 
Congress legislated for the price of armor, which they considered fair 
and satisfactory. 

The Chairman. And that was $400 a ton, in 1898 ? 

Mr. Grace. I think that $420 was the price finally placed. That 
price maintained for some years. It was the policy of the Navy De¬ 
partment to divide the armor among established concerns. Con¬ 
gress had legislated this price and we automatically quoted the price 
that Congress legislated. We kept on that way and we got one-third 
of the armor. Of course, it was the policy of the Navy Department 
to keep occupied all three investments which they had caused to be 
made. I believe that is right and proper and I think we should do 
it to-day. I do not think they have any business putting Bethlehem 
or Carnegie or Midvale out of business. I do not think that is the right 
policy for national preservation. If the Government is not satisfied 
that it is getting a correct and proper price for armor, it seems to me 
the logical thing for it to do is to investigate the industry, which you 
are doing. 

The Chairman. Yet we can not get at the bottom facts. 

Mr. Grace. Yes; you have your experts. 

The Chairman. Would you be willing to allow an expert from the 
Navy Department go through your books ? 

Mr. Grace. No; certainly not. 

The Chairman. How are we going to get at the facts if you refuse 
to tell us ? 

Mr. Grace. Just like we would estimate to go into a new industry. 
In the last few years we have gone into the projectile business, and 
we made estimates. Your people have made estimates. Admiral 
Strauss, I presume, has made estimates (I know his predecessors 
have) of the cost of a plant. You have full reports on that. 

The Chairman. Everyone of them varies. 

Mr. Grace. Not widely. All the way back to Admiral Niles, up 
to the estimate of Admiral Twining, they are very close, just as near 
as anybody has come—just as near as our own returns will be. They 
are not the same. You take the armor which was made by certain 
manufacturers on this year’s contracts, the Arizona , that we are 
making now. I presume the cost of that armor, as compared with 
the armor for the Pennsylvania, was at least $50, if not $100, a ton 
higher. I am not stating that as knowledge, but as estimation, as 
belief. 


ARMOR PLANT FOR THE UNITED STATES. 


73 


The Chairman. As an experienced manufacturer, you would not 
say that if the Government built its own factory it would get armor 
cheaper ? 

Mr. Grace. No, sir; I do not; nor as good. 

The Chairman. Admiral, that seems to be a reflection on the Bu¬ 
reau of Ordnance, that they can not manufacture as good armor as 
these private establishments. 

Mr. Grace. It would be a reflection on us, Senator, if, after 15 or 
20 years we could not make it better than a new establishment just 
starting in. The United States gets the best armor that is made in 
the world to-day. I am satisfied about that. And they are getting 
the best shells. We know because we have been in competition with 
the foreign manufacturers’ products on the other side. We have shot 
our shells and we have shot at our armor, and we know. No, Senator, 
it is a serious problem with us. We have got to get armor; if its only 
a thousand tons we had better take it at the best price we can get 
because we get that much return on our investment. It might not 
be ample, but that investment, that equipment, isn’t available for 
anything else. We can not go out and apply that to commercial 
manufacture; we depend on the United States Government for our 
customer; it must be one class of product and nothing else; we can 
not make engines or guns in the armor plant; it is for armor plate 
and nothing (use. If the United States erects an armor plant we might 
just as well go out of the business, so far as the United States Gov¬ 
ernment goes. 

The Chairman. If you see the consequences to the private manu¬ 
facturer of armor if the Government does go into the business of 
manufacturing its own armor, it would seem to me that you people 
who make the armor ought to get together and determine just what 
you will do, and let us know. 

Mr. Grace. Let the United States Government do as some of the 
foreign Governments do—make a contract for armor plate that calls 
for a tonnage, like-the English, like the German. The English plants 
are assured for years ahead full-capacity production, and the Eng¬ 
lish Government paying in the face of that $50 or $75 more a ton 
than the United States is paying, and these plants have been running 
full for years. That should have some bearing on the whole situa¬ 
tion, it seems to me. 

The Chairman. We can not get you to open up your books and 
let us see what that armor costs. 

Mr. Grace. No; I have stated my reasons for that. I do not 
think we ought to be called upon to do that. We have been investi¬ 
gated, and I think that Admiral Strauss’ department has a very 
close idea of what it costs to make armor. I should expect that they 
had. I have seen some reports published that would indicate that 
whoever made them up got information somewhere. I believe we 
make armor cheaper than anybody on account of our conditions on 
some things. 

The Chairman. Cheaper than Midvale or Carnegie ? 

Mr. Grace. I think we make armor cheaper than either Midvale 
or Carnegie. I do not know; that may be because I am so proud of 
our own establishment here and think that we are better than they 
are; but there are a number of reasons why we should make armor 
cheaper than they. 


74 


ARMOR PLANT FOR THE UNITED STATES. 


The Chairman. Would you mind stating some of them? 

Mr. Grace. We control our own power. Our power must be 
cheaper than theirs. We have cheaper labor than either of them. 
I think we have a better plant than either of them. 

Admiral Strauss. Carnegie has its own power, its own natural gas ? 

Mr. Grace. But I think likely they pay more per unit for their 
power than we do, and they use some bituminous coal in their armor 
plant. We get all our power from the waste gases; that is, the 
driving power, not the heating power in the armor factory. The 
electric power and steam power for driving plant I presume is cheaper 
than Carnegie’s or Midvale’s. Then Midvale again would be handi¬ 
capped in cost as against raw material. We do not have that same 
advantage over Carnegie, but we do have it over Midvale. 

The Chairman. What is the capacity of the Midvale Steel Co.’s 
works ? 

Mr. Grace. In armor? I do not know. 

The Chairman. What is the capacity of the Carnegie Works? 

Mr. Grace. I should imagine about 10,000 tons per year. I should 
imagine we are 2,000 or 3,000 tons a year higher than they are in 
capacity. 

The Chairman. And you do not know what the Midvale capacity is ? 

Mr. Grace. No; I do not. 

The Chairman. Have you any estimate of Midvale in your own 
mind ? 

Mr. Grace. Well, I should say from 6,000 to 7,000 tons. 

The Chairman. Well, all three of you could not make more than 
20,000 tons ? 

Mr. Grace. Oh, yes; we could make 25,000. We can make the 
armor for three ships, requiring about 24,000 or 25,000 tons. 

Mr. Padgett. Twelve and nine would be twenty-one and six would 
be twenty-seven. Say, conservatively, 25,000 tons. 

The Chairman. I have asked you all the questions I wanted. I 
haven’t got all the answers I would like to get. 

Mr. Grace. I want to answer them frankly. I have tried to tell 
the truth. 

The Chairman. I don’t doubt that. 

Mr. Grace. And if I have made any mistakes I will be glad to 
correct them. 

Mr. Padgett. Senator, if you are through, I would suggest that 
you swear the superintendent of the armor plant and the auditor now, 
and when we send the transcript of this hearing we will send the same 
list of questions to each one of them. 

The Chairman. And you think that will cover their written reply? 

Mr. Padgett. We will send the same list of questions to the super¬ 
intendent of the armor plant and to the auditor, and each one of you 
will make your own individual responses. They may be the same 
answers or they may not be the same answers. We will submit the 
same questions. 

Mr. Grace. They are bound to give the same information because 
the information will all come from our records. 

Mr. Padgett. And I presume the others will decline to answer the 
questions just as Mr. Grace has declined to answer them, but we 
wanted to submit these questions to more than one person, not just 
grouping the answers to one set of questions, but we will have three 


ARMOR PLANT FOR THE UNITED STATES. 


75 


sets of questions ; they will be the same questions submitted to three 
individuals, and each individual will answer for himself upon his oath. 

(Accordingly the chairman administered the oath to Mr. W. F. 
Roberts, general superintendent of the Lehigh plant of the Bethlehem 
Steel Co., and to Mr. F. A. Shick, comptroller and auditor of the Beth¬ 
lehem Steel Co.) 

STATEMENT OF MR. W. F. ROBERTS. 

Mr. W. F. Roberts, being duly sworn, testified as follows: 

The Chairman. What is your name ? 

A. W. F. Roberts. 

The Chairman. What is your official connection with the Bethle¬ 
hem Steel Co. ? 

A. General superintendent, Bethlehem Steel Co. 

Q. How much does it cost your company f. o. b. to produce a ton 
of K. C. armor, class A-l; that is, material, labor, and shop overhead 
charges?—A. Same answer as made bv Mr. E. G. Grace, president. 
Bethlehem Steel Co. 

Q. How much do you add to this cost for deterioration of plant 
and administration expenses ?—A. Same as to first question. 

Q. Has this cost been reached by taking the annual output of a 
single year, or of a term of years, and making allowance for rejections 
and ballistic failures?—A. Same as to first question. 

Q. What are the various components of this cost per ton?—A 
Same as to first question. 

Q. What is the cost per ton of the armor ingot at the forge, includ¬ 
ing all rejections?—A. Same as to first question. 

Q. Give the components, with their unit prices, that enter into a 
furnace charge for an armor heat?—A. Same as to first question. 

Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat?—A. Same as to first question. 

Q. How much does this amount to per ton of armor ingot pro¬ 
duced ?—A. Same as to first question. 

Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot?—A. Same as to first question. 

Q. What is the fuel charge for each ton of ingot?—A. Same as to 
first question. 

Q. What is the proportional laboratory superintendence charge 
for each ton of ingot?—A. Same as to first question. 

Q. What is the lifting, stripping, and chipping charge per ton of 
ingot?—A. Same as to first question. 

Q. What is the power charge, including steam, electric and water, 
for each ton of ingot?—A. Same as to first question. 

Q. What is the cost for forging?—A. Same as to first question. 

Q. What scrap allowance is made for condemned ingots?—A. 
Same as to first question. 

Q. How many tons of armor ingots did your company manufacture 
last year?—A. Same answer as made by Mr. E. G. Grace, president 
Bethlehem Steel Co. 

Q. What was the total number of these ingots in tonnage which 
were rejected before reaching forge?—A. Same as to first question. 

Q. How many tons of ingots were forged during the past year ?—A. 
Same answer as made by Mr. E. G. Grace, president, Bethlehem 
Steel Co 


76 


ARMOR PLANT FOR THE UNITED STATES. 


Q. How many tons were rejected during the forging?—A. Same 
as to first question. 

Q. What scrap allowance was made for these rejected during 
forging ?—A. Same as to first question. 

Q. What was the oxidization and scale loss at the forge ?—A. Same 
as to first question. 

Q. What did the labor for forging each ton of ingot amount to ?—A. 
Same as to first question. 

Q. What did the fuel for each ton of ingot forged amount to ?—A. 
Same as to first question. 

Q. What did the repairs to heating furnaces amount to for each 
ton of armor?—A. Same as to first question. 

Q. What did the electric power, light, steam, water, drafting, 
transportation, and inspection per ton of plate amount to during the 
forging ?—A. Same as to first question. 

Q. Of all the ingots forged and not rejected, what percentage was 
discarded? How many tons?—A. Same answer as made by Mr. 
E. G. Grace, president, Bethlehem Steel Co. 

Q. What allowance was made for the metal thus discarded?—A. 
Same as to first question. 

Q. What is the unit price per ton of plate when ready for carbon¬ 
izing ?—A. Same as to first question. 

Q. How many tons of armor plate were carbonized at the works of 
your company last year?—A. Same answer as made by Mr. E. G. 
Grace, president Bethlehem Steel Co. 

Q. What was the oxidization and scale in this treatment, in tons ?— 
A. Same as to first question. 

Q. What were the total number of plates rejected during carboni¬ 
zation?—A. Same as to first question. 

Q. What does the labor per ton of carbonized plate amount to ?— 
A. Same as to first question. 

Q. What does the material per ton of carbonized plate amount 
to ?—A. Same as to first question. 

Q. How much fuel per ton of plate is used in carbonizing?—A. 
Same as to first question. 

Q. How much did the furnace repairs per ton of carbonized plate 
amount to ?—A. Same as to first question. 

Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, transportation, amount to 
per ton of carbonized plate ?—A. Same as to first question. 

Q. How much is the carbonized plate worth per ton; no machin¬ 
ing ?—A. Same as to first question. 

Q. How many tons of armor plate were reforged by your company 
during the past year ?—A. Same answer as made by Mr. E. G. Grace, 
president Bethlehem Steel Co. 

Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
working the cost of armor?—A. Same as to first question. 

Q. What does the labor per ton for reforging amount to?—A. 
Same as to first question. 

Q. What do the repairs per ton for reforging amount to?—A 
Same as to first question. 

Q. What does the fuel per ton for reforging amount to?—A. 
Same as to first question. 


ARMOR PLANT FOR THE UNITED STATES. 77 

Q. What is the proportional amount of power—electric, steam, 
water—for reforging?—A. Same as to first question. 

Q. What does the proportional drafting, inspection, transporta¬ 
tion, and laboratory for reforging amount to?—A. Same as to first 
question. 

Q. How much discard is made after reforging?—A. Same answer 
as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. What allowance is made for this discard in reckoning the cost ?— 
A. Same as to first question. 

Q. What is the cost of armor per ton after reforging?—A. Same 
as to first question. 

Q. How many tons of armor plate were sent to treatment by your 
company during the past year ?—A. Same answer as made by Mr. 
E. G. Grace, president Bethlehem Steel Co. 

Q. How many tons were lost during treatment by rejection?—A. 
Same as to first question. 

Q. What does the labor per ton of treated plate amount to?—A. 
Same as to first question. 

Q. What does the material per ton of treated plate amount to?— 
A. Same as to first question. 

Q. What do the repairs per ton of treated plate amount to?— 
A. Same as to first question. 

Q. What does the fuel per ton of treated plate amount to?—A. 
Same as to first question. 

Q. What do the proportional charges per ton of treated plate 
amount to ?—A. Same as to first question. 

Q. What is the total cost per ton of treated and rectfied plate ?—A. 
Same as to first question. 

Q. How many tons of armor plate were sent to machining by your 
company' last year?—A. Same as to first question. 

Q. How many tons of machined plate were produced last year?— 
A. Same answer as made by Mr. E. G. Grace, president Bethlehem 
Steel Co. 

Q. Were there any rejections during the process of machining; if 
so, how many tons, and what allowance was made for the rejected 
material in reckoning the final cost ?—-A. Same as to first question. 

Q. How much per ton does the labor of machining amount to ?—A. 
Same answer as to first question. 

Q. How much does the machined scrap amount to ?—A. Same as to 
first question. 

Q. How much does the material for machining amount to, including 
oil, waste, repairing of tools, supply of tools?—A. Same as to first 
question. 

Q. How much do the repairs per ton of machined plate amount to 
during the machining operation ?—A. Same as to first question. 

Q. What do the proportional charges per ton of machined plate 
amount to?—A. Same as to first question. 

Q. What is the cost per ton of machined plate produced ?—A. Same 
as to first question. 

Q. How many tons of machined plate were presented by your 
company for shipment last year?—A. Same answer as made by Mr. 
E. G. Grace, president Bethlehem Steel Co. 

Q. What do the labor and material for preparation for shipment 
amount to per ton of finished plate?—A. Same as to first question. 


78 


ARMOR PLANT FOR THE UNITED STATES. 


Q. Iiow are the total water, steam, power, transportation, inspec¬ 
tion, drafting, and laboratory charges reckoned ?—A. Same answer 
as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. What were the total power charges for your plant last year— 
by power charges is meant electric power, steam power, water power, 
or producer gas for running engines, as the case may be—and how 
did you arrive at the method of assigning the various proportions to 
the various operations ?—A. Same as to first question. 

Q. The same information is desired for the laboratory, drafting, 
inspection, and transportation charges.—A. Same as to first question. 

Q. What is the cost per ton of shipped plate, class A-2 ?—A. Same 
as to first question. 

Q. What is the cost per ton of shipped plate, class B ?—A. Same 
as to first question. 

Q. What was the average cost per ton of class C, steel armor?— 
A. Same as to first question. 

Q. What do you reckon your working capital to be?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. What does the maintenance of your plant amount to per 
annum ?—A. Same as to first question. 

Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture 
and separate from depreciation?—A. Same as to first question. 

Q. What does this maintenance mean; to what is it applied?— 
A. Same as to first question. 

Q. What is the total of proportional administration charges made 
to armor; how has this been arrived at?—A. Same answer as made 
by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. Give a tabulated list showing the various salaries paid, and how 
proportionally divided, so as to include the armor plant?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. How much do the insurance charges on the armor plant amount 
to ?—A. Same answer as made by Mr. E. G. Grace, president Bethle¬ 
hem Steel Co. 

Q. How much taxes are chargeable to the armor plant ?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. How much do you charge to armor in behalf of the pension 
fund and liability fund?—A. Same answer as made by Mr. E. G. 
Grace, president Bethlehem Steel Co. 

Q. How much depreciation is charged against the armor plant; 
what is this depreciation; how has it been arrived at?—A. Same 
answer as made by Mr. E. G. Grace, presdient Bethlehem Steel Co. 

Q. After a year’s operations within which a certain sum of money 
has been set aside from the proceeds of the manufacture of armor 
for depreciation charge, what is done with this money?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. After depreciation charge has been made to a year’s operation, 
and there have been no replacements of tools, is this amount used to 
amortize the original investment?—A. Same answer as made by 
Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. Since the erection of your armor plant what has been the total 
amount of depreciation which has been charged into the cost of 
armor?—A. Same answer as made by Mr. E. G. Grace, president 
Bethlehem Steel Co. 


ARMOR PLANT FOR THE UNITED STATES. 


79 


Q. How much, if any, of this sum of money has been actually used 
for the installation of new machinery in place of old, for building 
new buildings, furnaces, etc., in place of old, and has this expendi¬ 
ture been added to the capital account ?—A. Same as to first ques¬ 
tion. 

Q. The remainder of this sum which has not been expended, has 
it been used for amortizing any of the original investment ?— 
A. Same as to first question. 

Q. How much money is invested in jmur armor plant ?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. Does this represent the total amount which has been expended 
for this plant, inclusive of all depreciation replacements?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. In reckoning your profit, is it reckoned as a profit on the total 
amount which has been put into the armor plant, or on the amount 
which has been put into the armor plant less all depreciation which 
has not been used for the purpose of replacement ?—A. Same answer 
as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

STATEMENT OF MR. F. A. SHICX. 

Mr. F. A. Shick, being duly sworn, testified as follows: 

The Chairman. What is your name? 

Mr. Siiick. F. A. Shick. 

The Chairman. What is your official connection with the Bethlehem 
Steel Co. ? 

Mr. Siiick. Comptroller and auditor, Bethlehem Steel Co. 

Q. How much does it cost your company f. o. b. to produce a ton 
of K. C. armor, class A-l; that is, material, labor, and shop over¬ 
head charges?—A. Same answer as made by Mr. E. G. Grace, presi¬ 
dent Bethlehem Steel Co. 

Q. How much do you add to this cost for deterioration of plant 
and administration expenses ?—A. Same as to first question. 

Q. Has this cost been reached by taking the annual output of a 
single year, or of a term of years, and making allowance for rejections 
and ballistic failures?—A. Same as to first question. 

Q. What are the various components of this cost per ton?— 
A. Same as to first question. 

Q. What is the cost per ton of the armor ingot at the forge, includ¬ 
ing all rejections?—A. Same as to first question. 

Q. Give the components, with their unit prices, that enter into a 
furnace charge for an armor heat?—A. Same as to first question. 

Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat ?—A. Same as to first question. 

Q. How much does this amount to per ton of armor ingot pro¬ 
duced?—A. Same as to first question. 

Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot?—A. Same as to first question. 

Q. What is the fuel charge for each ton of ingot?—A. Same as to 
first question. 

Q. What is the proportional laboratory superintendence charge 
for each ton of ingot ?—A. Same as to first question. 

Q. What is the lifting, stripping, and chipping charge per ton of 
ingot ?—A. Same as to first question. 


80 


ARMOR PLANT FOR THE UNITED STATES. 


Q. What is the power charge, including steam, electric, and water, 
for each ton of ingot?—A. Same as to first question. 

Q. What is the cost for forging?—A. Same as to first question. 

Q. What scrap allowance is made for condemned ingots?—A. 
Same as to first question. 

Q. How many tons of armor ingots did your company manufacture 
last year ?—A. Same answer as made by Mr. E. G. Grace, president 
Bethlehem Steel Co. 

Q. What was the total number of these ingots in tonnage which 
were rejected before reaching forge?—A. Same as to first question. 

Q. How many tons of ingots were forged during the past year ?— 
A. Same answer as made by Mr. E. G. Grace, president Bethlehem 
Steel Co. 

Q. How many tons were rejected during the forging ?—A. Same as 
to first question. 

Q. What scrap allowance was made for these rejected during 
forging ?—A. Same as to first question. 

Q. What was the oxidization and scale loss at the forge ?—A. Same 
as to first question. 

Q. What did the labor for forging each ton o* ingot amount to ?— 
A. Same as to first question. 

Q. What did the fuel for each ton of ingot forged amount to ?— 
A. Same as to first question. 

Q. What did the repairs to heating furnaces amount to for each 
ton of armor?—A. Same as to first question. 

Q. What did the electric power, light, steam, water, drafting, 
transportation, and inspection per ton of plate amount to during the 
forcing?—A. Same as to first question. 

Q. Of all the ingots forged and not rejected, what percentage was 
discarded? How many tons?—A. Same answer as made by Mr, 
E. G. Grace, president Bethlehem Steel Co. 

Q. What allowance was made for the metal thus discarded?—A. 
Same as to first question. 

Q. What is the unit price per ton of plate when ready for carbon¬ 
izing?—A. Same as to first question. 

Q. How many tons of armor plate were carbonized at the works of 
your company last year?—A. Same answer as made by Mr. E. G. 
Grace, president Bethlehem Steel Co. 

Q. What was the oxidation and scale in this treatment, in tons ?— 
A. Same as to first question. 

Q. What were the total number of plates rejected during carbon¬ 
ization?—A. Same as to first question. 

Q. What does the labor per ton of carbonized plate amount to ?— 
A. Same as to first question. 

Q. What does the material per ton of carbonized plate amount to ?— 
A. Same as to first question. 

Q. How much fuel per ton of plate is used in carbonizing ?—A. Same 
as to first question. 

Q. How much did the furnace repairs per ton of carbonized plate 
amount to?—A. Same as to first question. 

Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, transportation, amount to 
per ton of carbonized plate ?—A. Same as to first question. 


ARMOR PLANT FOR THE UNITED STATES. 81 

Q. How much is the carbonized plate worth per ton; no ma¬ 
chining ?—A. Same as to first question. 

Q. How many tons of armor plate were reforged by your com¬ 
pany during the past year ?—A. Same answer as made by Mr. E. G. 
Grace, president Bethlehem Steel Co. 

Q. How many tons of plate were rejected during the reforging pro¬ 
cess, and was any allowance for the recovered material made in work¬ 
ing the cost of armor ?—A. Same as to first question. 

Q. What do the labor per ton for reforging amount to ?—A. Same 
as to first question. 

Q. What does the repairs per ton for reforging amount to?—A. 
Same as to first question. 

Q. What does the fuel per ton for reforging amount to ?—A. Same 
as to first question. 

Q. What is the proportional amount of power—electric, steam, 
water—for reforging ?—A. Same as to first question. 

Q. What does the proportional drafting, inspection, transportation, 
and laboratory for reforging amount to?—A. Same as to first 
question. 

Q. How much discard is made after reforging?—A. Same answer 
as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. What allowance is made for this discard in reckoning the 
cost ?—A. Same as to first question. 

Q. What is the cost of armor per ton after reforging ?—A. Same as 
to first question. 

Q. How many tons of armor plate were sent to treatment by your 
company during the past year ?—A. Same answer as made by Mr. 
E. G. Grace, president Bethlehem Steel Co. 

Q. How many tons were lost during treatment by rejection?—- 
A. Same as to first question. 

Q. What does the labor per ton of treated plate amount to?— 
A. Same as to first question. 

Q. What does the material per ton of treated plate amount to ?— 
A. Same as to first question. 

Q. What do the repairs per ton of treated plate amount to?— 
A. Same as to first question. 

Q. What does the fuel per ton of treated plate amount to?—- 
A. Same as to first question. 

Q. What do the proportional charges per ton of treated plate 
amount to ?—A. Same as to first question. 

Q. What is the total cost per ton of treated and rectified plate ?— 
A. Same as to first question. 

Q. How many tons of armor plate were sent to machining by your 
company last year ?—A. Same as to first question. 

Q. How many tons of machined plate were produced last year ?— 
A. Same answer as made by Mr. E. G. Grace, president Bethlehem 
Steel Co. 

Q. Were there any rejections during the process of machining; if 
so, how many tons, and what allowance was made for the rejected 
material in reckoning the final cost?—A. Same as to first question. 

Q. How much per ton does the labor of machining amount to ?— 
A Same as to first question. 

Q. How much does the machined scrap amount to?—A. Same as 
to first question. 

83344—H. Doc. 1620 f 63-3-6 


82 


ARMOR PLANT EOR THE UNITED STATES. 


Q. How much does the material for machining amount to, including 
oil, waste, repairing of tools, supply of tools?—A. Same as to first 
question. 

Q. How much do the repairs per ton of machined plate amount to 
during the machining operation?—A. Same as to first question. 

Q. What do the proportional charges per ton of machined plate 
amount to ?—A. Same as to first question. 

Q. What is the cost per ton of machined plate produced ?—A. Same 
as to first question. 

Q. How many tons of machined plate were presented by your com¬ 
pany for shipment last year ?—A. Same answer as made by Mr. E. G. 
Grace, president, Bethlehem Steel Co. 

Q. What do the labor and material for preparation for shipment 
amount to per ton of finished plate?—A. Same as to first question. 

Q. How are the total water, steam, power, transportation, inspec¬ 
tion, drafting, and laboratory charges reckoned ?—A. Same answer as 
made by Mr. E. G. Grace, president, Bethlehem Steel Co. 

Q. What were the total power charges for your plant last year—by 
power charges is meant electric power, steam power, water power, or 
producer gas for running engines, as the case may be—and how did 
you arrive at the method of assigning the various proportions to the 
various operations ?—A. Same as to first question. 

Q. The same information is desired for the laboratory, drafting, 
inspection, and transportation charges ?—A. Same as to first question. 

Q. What is the cost per ton of shipped plate, class A-2 ?—A. Same 
as to first question. 

Q. What is the cost per ton of shipped plate, class B ?—A. Same as 
to first question. 

Q. What was the average cost per ton of class C steel armor?— 
A. Same as to first question. 

Q. What do you reckon your working capital to be?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. What does the maintenance of your plant amount to per 
annum ?—A. Same as to first question. 

Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture, 
and separate from depreciation ?—A. Same as to first question. 

Q. What does this maintenance mean; to what is it applied?— 
A. Same as to first question. 

Q. What is the total of proportional administration charges made 
to armor; how has this been arrived at?—A. Same answer as made 
by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. Give a tabulated list showing the various salaries paid, and how 
proportionately divided, so as to include the armor plant ?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. How much do the insurance charges on the armor plant 
amount to ?—A. Same answer as made by Mr. E. G. Grace, president 
Bethlehem Steel Co. 

Q. How much taxes are chargeable to the armor plant ?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. How much do you charge to armor in behalf of the pension fund 
and liability fund ?—A. Same answer as made by Mr. E. G. Grace,, 
president Bethlehem Steel Co. 


ARMOR PLANT FOR THE UNITED STATES. 


83 


Q. How much depreciation is charged against the armor plant; 
what is this depreciation; how has it been arrived at?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. After a year’s operations within which a certain sum of money 
has been set aside from the proceeds of the manufacture of armor for 
depreciation charge, what is done with this money?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. After depreciation charge has been made to a year’s operation 
and there have been no replacements of tools, is this amount used to 
amortize the original investment?—A. Same answer as made by 
Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. Since the erection of your armor plant what has been the total 
amount of depreciation which has been charged into the cost of 
armor?—A. Same answer as made by Mr. E. G. Grace, president 
Bethlehem Steel Co. 

Q. How much, if any, of this sum of money has been actually used 
for the installation of new machinery in place of old, for building new 
buildings, furnaces, etc., in place of old, and has this expenditure been 
added to the capital account?—A. Same as to first question. 

Q. The remainder of this sum which has not been expended, has it 
been used for amortizing any of the original investment?—A. Same 
as to first question. 

Q. How much money is invested in your armor plant?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. Does this represent the total amount which has been expended 
for this plant, inclusive of all depreciation replacements?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

Q. In reckoning your profit, is it reckoned as a profit on the total 
amount of money which has been put into the armor plant, or on the 
amount which has been put into the armor plant less all depreciation 
which has not been used for the purpose of replacement?—A. Same 
answer as made by Mr. E. G. Grace, president Bethlehem Steel Co. 

FRIDAY, NOVEMBER 27, 1914. 

Special Committee, 

Philadelphia, Pa. 

The committee met at 10.45 a. m. at the office of the Midvale Steel 
Co., Hon. B. R. Tillman (chairman) presiding. 

Present, Hon. L. P. Padgett, Member of Congress; Rear Admiral J. 
Strauss, United States Navy, members of the committee. Lieut. 
Commander C. C. Bloch, United States Navy, and Lieut. Commander 
H. E. Cook, United States Navy; Mr. J. B. Knight and Mr. E. S. 
Theall, assistants to the committee. 

There were also present Mr. W. P. Barba and Mr. J. B. King, 
representing the Midvale Steel Co. 

STATEMENT OF MR. WILLIAM P. BARBA, MANAGER OF THE 
MIDVALE STEEL CO. 

Mr. W. P. Barba, having been duly sworn, testified as follows: 

The Chairman. Will you please tell us who you are and what 
position you hold with the company? 

Mr. Barba. William P. Barba, manager. 


84 


ARMOR PLANT FOR THE UNITED STATES. 


The Chairman. Manager of the Midvale Steel Co ? 

Mr. Barba. Manager of the Midvale Steel Co. 

The Chairman. What is the capitalization of that company? 

Mr. Barba. Nine million seven hundred and fifty thousand dollars. 

The Chairman. How much is watered stock? 

Mr. Barba. None. 

The Chairman. All solid investment ? Where is that stock owned ? 

Mr. Barba. It is owned chiefly by the two estates, the estate of 
Charles J. Harrah owning a majority and the estates of John Sellers 
and William Sellers owning the minority portion of that stock. 

The Chairman. What dividends does it pay? 

Mr. Barba. It paid three per cent during the year just closed. 

The Chairman. Anything carried to profit and loss ? 

Mr. Barba. Well, of course, there is a small addition to the surplus. 
The books for the year 1913-1914 which closed on October 31, that 
being the end of our fiscal year, are not yet made up, but the dividend 
rate was reduced that year to three per cent from four per cent which 
we paid the year before, so you see there is not very much allotted to 
surplus in that year or we would not be reducing the dividend rate. 

The Chairman. Has the company any debt ? 

Mr. Barba. No funded debt of any sort, only the one issue of 
stock—it is neither common nor preferred—and there is no funded 
debt. 

The Chairman. Its financial conditions are entirely satisfactory? 

Mr. Barba. Its financial conditions are entirely satisfactory. Of 
course, we have the regular obligations which are necessary in carry¬ 
ing on a business of this magnitude. 

The Chairman. How long has this company been engaged in the 
manufacture of armor for the Government? 

Mr. Barba. Since 1903. 

The Chairman. Were you here then ? 

Mr. Barba. Yes, sir. 

The Chairman. Do you know about the origin of the bid that the 
Midvale Steel Co. made ? 

Mr. Barba. At that time ? 

The Chairman. Yes. 

Mr. Barba. No, sir; I was not in touch with that branch of our 
work at that time. 

The Chairman. Who does know ? Who would be the one to inter¬ 
rogate on that one point ? 

Mr. Barba. You mean the original bid? 

The Chairman. Yes. 

Mr. Barba. I think that Mr. Petre, who was manager at that time, 
would be the man. 

The Chairman. Is he here ? 

Mr. Barba. He retired from the service of this company in March 
of this year, and is now living in Europe. 

The Chairman. He is not in this country at all ? 

Mr. Barba. No, sir. He reached an age which he thought entitled 
him to retire from any further active work. 

The Chairman. Is there any other man who was in the employ 
of the company who had anything to do with that contract? 


ARMOR PLANT FOR THE UNITED STATES. 


85 


Mr. Barba. I think the president, Mr. Harrah, would know, but 
Mr. Petre was the active man. In this company the manager is the 
active man for the general work of the company. 

The Chairman. Is Mr. Harrah in town? 

Mr. Barba. No; he is in New York; he is most of the time in New 
York; he is over here occasionally. 

The Chairman. Well, will your books or your correspondence show 
the origin of that bid, why you made that bid ? 

Mr. Barba. Will you let me ask you exactly what is meant by “the 
origin of the bid” ? 

The Chairman. Well, I wanted to know why you entered into com¬ 
petition with the other two firms. What was the inducement? 

Mr. Barba. I think my general knowledge will enable me to 
answer that question to your satisfaction. This company was the 
original and pioneer ordnance manufacturer for the United States 
Government, we having begun our ordnance work about 1880, when 
no one else was engaged in it, and we were not manufacturing armor 
alone of all the ordnance supplies required by the Government. We 
were manufacturing guns and projectiles, and ship and engine forgings, 
all of which were required by the Navy, but we were not manufac¬ 
turing armor, and naturally we wanted to extend at that time our 
activities toward the supply of all ordnance materials, and we tried 
for several years to make a successful bid for armor before a plant was 
erected. I remember that our original bid contemplated beginning 
delivery in 26 months, during which time we hoped to be able to 
erect a plant that would enable us to begin delivery of the compara¬ 
tively small sizes of armor which were required for the purposes of the 
Navy at that time, and after making several bids without success 
under those conditions we did begin the erection of an armor-manu¬ 
facturing plant. 

The Chairman. Without having any contract at all? 

Mr. Barba. Without having any contract at all; and we went 
right on bidding, and finally, when the Mississippi and Idaho were 
let, we were allowed a portion of the armor required for those ships. 
Our plant was then practically completed, and we had made experi¬ 
mental firings at Indian Head, I think, in the winter of 1903. 

The Chairman. Was it generally believed among those who were 
in the business of armor making that armor making was very profit¬ 
able ? 

Mr. Barba. We naturally thought that we would make a profit, 
or we would not have spent all those millions of dollars that we did. 

The Chairman. Didn’t you believe that Carnegie and Bethlehem 
had a good thing, and therefore you wanted to share in it ? 

Mr. Barba. Unquestionably. 

The Chairman. What was the character of the first bid ? 

Mr. Barba. You mean the prices? 

The Chairman. Yes. 

Mr. Barba. Would you let me send for a memorandum on that? 
I want to be accurate. 

The Chairman. We w T ant you to be entirely accurate, because we 
want to get at the facts, so as to be able to report to Congress just 
what, in "our judgment, the policy of the Government ought to be. 
You know it is contemplated now that the Government shall build 


86 


ARMOR PLANT FOR THE UNITED STATES. 


its own armor-plate factory, in order to be free from the hold-up 
which we believe is now being followed by the combination that is 
robbing the Government and charging excessive prices. 

Mr. Barba. I have prepared a memorandum, Senator, which is 
still in very rough form, thinking that you might want to ask me 
exactly that line of questions, what our bids were at the different 
periods when we bid successfully and unsuccessfully for armor, and 
just as much of that memorandum as you like you can have, either 
as a reply to this question or to any others you may want to ask. 

The Chairman. Later we will submit a series of questions pre¬ 
pared by the committee, and probe as deeply as you will allow us to 
go. We have been very unfortunate in our previous efforts to get 
at the bottom facts by unwillingness of the companies to expose 
their secrets to their competitors at home and abroad, and the 
general answer has been, “1 do not know,” or, “I am not willing to 
tell,” and therefore we have all retired gracefully, and bowed our 
thanks, thankful for what we got, although it was little or nothing. 
Now, we want you to open up and tell us all about this matter, 
because you realize that if the Government enters into its own armor 
manufacture itself it will destroy your business in that respect, at 
least. 

Mr. Barba. Unquestionably. 

The Chairman. That is, you will make no more armor, and it 
would be very unfortunate for the company as well as ourselves if 
we (meaning the Government) were to manufacture our own armor 
because it would be much better if we should have the manufac¬ 
turers supply the Government at a reasonable price; instead of com¬ 
bining they should compete, but we have found that they would not 
compete and we believe are in a combine. We may be wrong. Will 
you open up your books and let us see whether you are in the combine ? 

Mr. Barba. You go ahead with your questions and I will answer 
them faithfully. 

The Chairman. Another question right there. Would you be 
willing for the Navy Department to send an expert bookkeeper over 
here and go through your books ? 

Mr. Barba. Certainly not. 

The Chairman. Why not? 

Mr. Barba. These books are our private property. They are the 
basis of our business. 

The Chairman. Hasn’t the Government the power, under the 
Department of Commerce, to send an expert ? 

Mr. Barba. And keep matters confidential; yes. Mr. Daniels re¬ 
fused to keep these things confidential when we were asked to fur¬ 
nish them, and we said we would give them if they were kept confi¬ 
dential. 

The Chairman. He couldn’t afford to huggermugger behind the 
curtain and appear to be acting in collusion with you, therefore he 
had to be open. 

Mr. Barba. You are still more open than he. 

The Chairman. We do not want you to answer anything that you 
are not willing to answer, and we would not probe in that direction; 
but you say you are willing to give us all the facts, and when I ask 


ARMOR PLANT FOR THE UNITED STATES. 


87 


you if you would be willing to let an expert from the Navy Depart¬ 
ment come here and go through your books, you say, “No.” 

Mr. Barba. Yes, sir. 

The Chairman. Well, how are we going to get at the bottom facts 
and understand really what armor costs you, except to take your 
word for it? 

Mr. Barba. Is it essential that you should know what armor costs 
us ? It appears to be essential for you to know what armor is going 
to cost the United States to manufacture. 

The Chairman. And how are we going to find that out except by 
going to those men who are now manufacturing armor and finding 
out the truth? 

Mr. Barba. Your officers who are stationed in the works, particu¬ 
larly in these works, have access to the whole manufacturing with the 
exception of some work which we ask them to retain as confidential, 
having reference to our processes, etc. Estimates have been made 
from time to time by these officers, whom you have stationed here to 
inspect the integrity of the work we manufacture. I say that these 
officers have made estimates and returns to the department of what, 
in their judgment, constitutes the cost of armor as manufactured at 
these works, and presumably the same at other works. These fig¬ 
ures have been published. Were we to disclose the books of the 
company in the way that you propose, it would be no more possible 
to avoid disclosure of what those books show than has been the case in 
the past when presumably confidential reports were sent in to the 
department, and we wish to protect ourselves against that condition, 
much as I personally believe it to be to the interest of this company 
to tell you what armor costs us to manufacture; because I firmly be¬ 
lieve that if you knew what it cost this company to manufacture 
armor under the present specifications it would be the strongest possi¬ 
ble deterrent in the purpose of the Government, as expressed in the 
last naval act, to build its own plant. 

The Chairman. Well, if we could feel satisfied that the Govern¬ 
ment is not suffering from a combination and was actually getting 
competition, I do not have any idea that the Government would build 
any armor factory at all, but we found that the reduction in the cost 
of powder was so great when the Government went into its manufac¬ 
ture, that we feel that if the Government makes its own armor it will 
get an equal reduction there. 

Mr. Barba. I really know nothing about the manufacture of pow¬ 
der, except the debates in Congress have shown the prevailing prices 
and the present prices of the manufacture of powder, and the reports 
of Admiral Strauss show what the powder costs him to manufacture 
at Indian Head. I know little of the overhead costs of the plant re¬ 
quired for powder, but I do know from our close touch with the manu- 
ufacture of armor and gun forgings and the finished guns, and the dis¬ 
cussions that we have had on these subjects in the Navy Department, 
in the Bureau of Ordnance, from time to time during the past years, 
that the Government does not manufacture its present lines of manu¬ 
facture on the same lines that a commercial concern is compelled to 
follow. We are in competition with the world on our commercial 
lines of manufacture, and we know. 

The Chairman. Right here, do you make armor for other Govern¬ 
ments ? Has this company had foreign contracts ? 


88 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Barba. Just one; for the Italian Government. 

The Chairman. For what battleship ? 

Mr. Barba. The San Marco and the San Gorgio. 

The Chairman. Was it the same type of armor that you are manu¬ 
facturing for the United States ? 

Mr. Barba. Practically. We made a bid of $455.70 per ton for 
2,100 tons for the Italian Government and were awarded the con¬ 
tract, and in addition to the gross sum we received about $15,000 
more on that contract for some peculiarities of the specifications, 
which reimbursed us for the scrap which was cut off, such as the 
holes in the port plates, like the one you saw in the shop this morn¬ 
ing. The Italian Government paid for that material, as well as the 
shipped plate, so that while the contract price was $455 per ton, we 
really received more than that. The date was approximately 
1906-7. 

The Chairman. What does your present contract with the Gov¬ 
ernment amount to ? 

Mr. Barba. The amount? 

The Chairman. The amount of armor plate that you are manu 
facturing. 

Mr. Barba. Let me define that a little more closely. You mean 
the contract that you saw them manufacturing out there this morn¬ 
ing for the Arizona. 

The Chairman. The last one Admiral Strauss gave you. 

Admiral Strauss. The very recent one. 

Mr. Barba. The very recent one will be for the armor for one ship, 
the Mississippi, amounting approximately to 8,500 tons, and at a 
base price of $425 per ton. 

The Chairman. Was that your bid, or were you compelled to lower 
that a little ? 

Mr. Barba. We were compelled to lower it from the original figure 
of $436. The Secretary had two or three conferences with us and 
asked us to revise our bid, which we did, and we finally offered the 
Secretary a letter containing a sealed bid—that is, a nondisclosed 
bid—and in that letter we advised him that we would be glad to take 
the armor for one ship, which was our capacity at this time, at the 
lowest prices which any competitor offered him at this time, and he 
thereupon wrote us offering us that armor at $425 a ton, our bid hav¬ 
ing been revised from $436 a ton to $427 a ton, and we accepted the 
armor for one ship at a base price of $425 per ton. 

The Chairman. Have you kept your books in a way to find out 
for your own satisfaction just what armor plate costs you ? 

Mr. Barba. We believe we have. We aim to do so. 

The Chairman. Will you tell us ? 

Mr. Barba. The cost as disclosed by the books I must decline to, 
much as I should like to give it, and I believe it would be a useful 
thing, but we are advised by counsel to reserve the disclosure of our 
costs upon our books. That is a matter entirely private to the 
higher officers of this company. 

The Chairman. You say the papers and correspondence in rela¬ 
tion to the first contract are not here, or are here ? 

Mr. Barba. Unquestionably we have those papers on file. 

The Chairman. Will you be willing to allow our expert examine 
those ? 


ARMOR PLANT FOR THE UNITED STATES. 


80 


Mr. Barba. You mean the papers comprising the bids 9 

The Chairman. Why did Midvale bid? That is what I want to 
know. Will that correspondence show why you bid? 

Mr. Barba. The original correspondence, Senator? In that case 
there is no correspondence except that we replied to the Govern¬ 
ment’s invitation to bid and introduced a bid. Probably I do not 
understand the purport of your question. 

The Chairman. What I am really after is to get at the facts which 
led this company to go in and bid for armor plate when Carnegie 
and Bethlehem seemed to have the business so tightly gripped that 
it was not worth while. I was on the Naval Committee at the time 
and I remember hearing a rumor rather than any direct information 
that Midvale would bid, and it finally did bid and got a contract 
because it was lower than the other two, and then President Roose¬ 
velt of his own volition, and without any authority of law, divided 
it up and gave Bethlehem and Carnegie part of it, you only getting 
one-third of the original contract. 

Mr. Barba. In the original contract which we secured? 

The Chairman. I would like to know the amount of armor and 
the price Midvale bid. I can get that in the Navy Department, of 
course. 

Mr. Barba. This original contract given to Midvale was for armor 
for the Mississippi and Idaho. There were about 16,000 tons re¬ 
quired, and Midvale was awarded a little over one-third of that armor, 
having bid for class A $398 per ton; Carnegie’s and Bethlehem’s bids 
at that time were alike at $420 per ton. This was in October, 1903. 

Mr. Padgett. The Bethlehem and Carnegie companies were re¬ 
quired to come to your bid, I believe. 

Admiral Strauss. How much was that, 5,000 tons ? 

Mr. Barba. Yes. 

Admiral Strauss. Was it profitable to the company to manu¬ 
facture that 5,000 tons at $398 per ton? 

Mr. Barba. Being an initial contract it certainly was not, because 
we had everything to shake down, all kinds of difficulties to meet. 
Mr. Padgett’s question, as to whether Bethlehem and Carnegie re¬ 
ceived their armor at the price at which we received ours, should be 
answered negatively. The Bethlehem and Carnegie companies were 
awarded their proportions of armor at their prices, their average 
being, plus royalties, $450.63 per ton as against an average price of 
$397 bid by Midvale, which asked no royalty, so that one-third of the 
Mississippi and Idaho armor was placed witK us at $397 net, and two- 
thirds were placed with Bethlehem and Carnegie at $450.63 net. 

The Chairman. Those were the facts as disclosed by the official 
records ? 

Mr. Barba. So far as we can get them; yes. 

Admiral Strauss. Are you not mistaken in saying that this 16,000 
tons was for the Idaho and Mississippi ? 

Lieut. Commander Bloch. The armor for the Vermont , Kansas, 
and Minnesota was advertised for at the same time. 

The Chairman. How long did it take you to produce that 5,000 
tons ? 

Mr. Barba. I can not answer that accurately, but if you will leave 
the question open I will supply it later. (Further answer to question 
54—About two years.) 


90 


ARMOR PLANT FOR THE UNITED STATES. 


The Chairman. Will you tell the committee how much money 
you had invested in your armor plant when you started to produce 
that armor? 

Mr. Barba. I can only speak from general knowledge and would 
not like this answer to go down as an accurate statement. The 
general knowledge I have handed to me by the conversations with 
Mr. Petre, my predecessor, at different times, showed that we had 
approximately $3,000,000 in cash laid aside for the purpose of build¬ 
ing this armor plant, and that the construction required all of this 
three million and practically two million more at that time. 

The Chairman. In other words, you mean to sav that you spent 
$5,000,000? 

Mr. Barba. At that time, and have extended the plant very 
materially since. 

Mr. Padgett. What time was that you speak of, that you expended 
$5,000,000? 

Mr. Barba. 1903. 

Mr. Padgett. I have before me House Document No. 193, Fifty- 
ninth Congress, second session, “Cost of Armor Plate and Armor 
Plant/’ the report of the committee that was investigating it, in 
which, on page 30, appears the following: 

The Midvale Co. furnished the board with general figures as to the cost of its armor 
plant, omitting any details of how this cost is made up. The statement of this com¬ 
pany shows that it has expended on its armor plant somewhat in excess of $3,500,000, 
but explains that the amount is not accurately stated because of the transfer to armor 
plant of certain tools installed previous to its entering the field of armor making, and 
to the further fact that certain other tools that might fairly be classed as armor plant 
are not exclusively used in that plant. The company further states that this esti¬ 
mate does not include the value of the ground occupied or interest on the construction 
investment, but does take account of the cost of designing and superintendence. 

Now, in 1903, I understand you to have stated that you had 
expended $5,000,000, and this statement that was furnished in 1906 
put the amount, as I have just read, at $3,500,000. 

Mr. Barba. My answer also included that I have no accurate knowl¬ 
edge on this matter, but that in conversation with Mr. Petre, the. 
manager up to the beginning of this year, 1 had gathered that such 
were the facts. 

Mr. Padgett. Yes. Can you put into your hearings, when they 
come to you for revision, a statement as to the cost at different 
periods, say in 1903, 1906, and at the present time? 

Mr. Barba. I think that can be done. I shall be very glad to take 
the matter up when I see the form of your question. 

Mr. Padgett. When the question comes back to you for revision 
I would be glad if you would give us those figures, and any answer 
to this question necessary for information. 

Mr. Barba. I understand. [Further answer to question:] We 
find by examination of our books that in 1903, the armor plant being 
still uncompleted, we have no book value. In 1906-1907 the book 
value of our armor plant was $3,905,527.12. In 1914 the book value 
of our armor plant was $4,993,654.17, after having been depreciated 
yearly by a rate approximating 7| per cent yearly depreciation. 
This rate has been found to be too low and a rate more nearly a 10 
per cent basis will have to be used in future, owing to the great wear 
and tear on machinery and by reason of changing requirements as 



ARMOR PLANT FOR THE UNITED STATES. 91 

to size, mass, quality of plates, etc. The reproduction costs of this 
plant and equipment would be much greater to-day. 

The Chairman. You are aware that this committee has power to 
send for persons and papers ? I think it very essential that we should 
get some papers that will show us why Midvale went into that com¬ 
petition with Carnegie and Bethlehem, also whether there is at this 
time any combination or not. Can you throw any light on that sub¬ 
ject ? 

Mr. Barba. Why we went into the competition? 

The Chairman. Yes. 

Mr. Barba. As already indicated in a previous answer, we un¬ 
questionably believed that we could make a profit on the manufac¬ 
ture of armor at the prices which were then obtained for armor con¬ 
tracts, and I have no doubt, although no sure knowledge on this 
point, that estimates were made by the then officials of the company 
to show what in their belief would be the manufacturing cost of 
armor in 1903, so that they unquestionably satisfied themselves that 
at the then prevailing prices a profit could be obtained. 

The Chairman. How long have you been associated with the 
company ? 

Mr. Barba. Thirty-five years. 

The Chairman. You were not anywhere near the top then? 

Mr. Barba. I was in charge of one of the manufacturing depart¬ 
ments at that time. 

Mr. Padgett. May I ask you a question. If you could take a 
contract in 1903 at $398 base price on the basis of 5,000 tons, I will 
ask you to state if the different companies could not afford to take a 
contract for 16,000 tons (the Bethlehem Co. has 16,000 tons), at less 
than $425 per ton at the present time. 

Mr. Barba. Mr. Padgett, the answer to your question is a very 
simple one. The character of armor manufactured in 1903 in no 
way compares with the character of armor manufactured now, either 
in size, weight, or bulk of the individual pieees, the ballistic require¬ 
ments, the character of projectiles used in testing armor, or even the 
cost of raw material and wages, both of which have very materially 
increased in the ten years that have elapsed in that period, and wages 
in particular have increased approximately 50 per cent through the 
necessity of manufacturing armor on the eight-hour law. You know 
most of our processes in manufacturing require operations both day 
and night. We therefore, have divided our gangs into three shifts 
of eight hours each and we have found it absolutely necessary to pay 
for eight hours work exactly what we formerly paid for ten hours 
work, so that the company gets absolutely no increase of production 
from most of these processes and is obliged to pay a very much larger 
sum in wages. At the same time the rate of wages has materially in¬ 
creased during the ten years that have elapsed. The character oi the 
armor is very different, as your own technical men will affirm. The 
requirements are more severe. The difficulties of manufacture have 
been multiplied. I will not say that the percentage of rejections has 
increased, because I believe that the capacity of the makers to manu¬ 
facture this newer type of armor has also advanced. 

The Chairman. You mean their skill and knowledge? 

Mr. Barba. Their skill and knowledge have advanced. I think 
it would be quite an interesting study to look up the relative per- 


92 


ARMOR PLANT FOR THE UNITED STATES. 


centages of failing plates in 1903 and 1913. Possibly Air. Bloch 
knows offhand what this amounts to. I must say I do not, but I am 
going to look it up through plain interest in the subject. So that, 
with the advancing requirements for the production of armor and 
the increasing difficulties, I believe that the price of armor to-day is 
too low as compared with the present-day cost of manufacture. As 
an illustration of that I do not mind telling you, Senator, this much 
from our books. We should really consider the manufacture of 
modern armor as represented only by the Pennsylvania armor or the 
Arizona armor because the specifications took a wide advance about 
that time. The cost of producing the Arizona armor is approxi¬ 
mately $20 per ton more than the cost of producing the Pennsyl¬ 
vania armor at this plant. [Further answer to question:] For the 
Mississippi and Idaho , which was our initial contract, there were 
11 ballistic tests and no failures. These being the first groups of 
armor ever submitted by this company. In the most recently com¬ 
pleted contracts, namely, the Arizona and Pennsylvania, there were 
four groups of armor, each requiring ordinarily four test plates for 
the acceptance of the four groups; to pass these four groups it was 
necessary to present eight plates, four of which failed on ballistic 
test, requiring substitution or further test plates to the number of an 
additional four plates, with the consequent loss to the manufacturer. 
Thus, the increased severity of specifications and difficulty of meet¬ 
ing them resulted in reducing the effective price per ton received by 
us by the amount of $33 per ton on the contracts of 5,737 tons—r 
$190,000 for the Arizona and Pennsylvania. 

Mr. Padgett. Then, in your progress you are reducing the cost of 
manufacture ? 

Air. Barba. No; the cost and risk of manufacturing advanced 
with the most recent contract. 

The Chairman. That is due to the severer specifications ? 

Mr. Barba. To the seyerer specifications, and possibly to our lack 
of skill, as you remarked a moment ago. We might not have been 
very successful in that, but Admiral Strauss will confirm the fact 
that the specifications for battleship 39 were way in advance of the 
specifications for battleship 38, as a natural result of which the 
contract just about completed shows us an advance in cost of manu¬ 
facture for battleship 39 over battleship 38 of approximately $20 
per ton. 

Mr. Padgett. You mentioned a moment ago about the eight-hour 
law. What do you estimate was the percentage of the increased 
cost of manufacturing due to the eight-hour law, if any 1 ? Was 
there any increased cost in adopting the eight-hour law? You get 
two hours less work. Do you get more efficient service during the 
8 hours than you did during 10 hours ? 

Mr. Barba. Air. Padgett, you have opened up two very interest¬ 
ing questions. The first one, about the added cost due to the impo¬ 
sition of the eight-hour law, was one which we estimated, when mak¬ 
ing our price for the armor for the Pennsylvania , which was the first 
to be manufactured under the new eight-hour law, as approximately 
10 per cent advance in cost; it was a most indeterminable point; the 
only thing you could figure on was wages. You do not know when you 
begin an armor plate how much money you are going to spend for 
wages. For instance, if you have a failing plate and you are re- 



ARMOR PLANT FOR THE UNITED STATES. 


93 


quired to re-treat a group or a portion of the group, each of those 
plates that are re-treated stands you very close to a thousand dollars 
for each re-treatment, and the wages all go in there at the advanced 
rate. We found it necessary to take men off the 10-hour or the 12- 
hour shifts and pay them the same money for eight hours that we 
formerly paid them for 10 hours or 12 hours, so that the 10-hour man 
or the 12-hour man had his rate of wages per day increased 50 per 
cent. 

Admiral Strauss. Did you pay by the hour when you cut the hours 
of labor down ? 

Mr. Barba. We give exactly the same rate for a period covering 
three weeks that they had made in the same period when working 
under the 10-hour basis or the 12-hour basis. The men in three 
shifts were paid the same money, because each shift, being reduced 
from 12 hours to 8 hours or from 10 hours to 8 hours, was paid the 
same for 8 hours that it formerly got for 10 hours or 12 hours. In 
other words, a cycle of three turns makes the A, B, and C shifts. 
That covers a cycle, so that in three weeks he is guaranteed the aggre¬ 
gate for three weeks that he got in three weeks under the old systejn. 

Mr. Padgett. Then, on the question of the efficiency of the service. 
What is the relative efficiency of the total 8 hours as compared 
with the efficiency of the total work of the 10 hours and of the 12 
hours ? 

Mr. Barba. Your question is an exact parallel to one that was 
asked me by the chairman of the committee of Federal industrial 
research last June, when discussing the eight-hour day, and if you 
do not mind I will tell you not only with reference to armor, but 
other kindred matters, because they are all tied together. The loco¬ 
motive engineers, the crane operators, and repair men throughout all 
the works were working 10 hours per day on the maintenance machin¬ 
ery which is used to produce armor on an 8-hour basis. Now, 
that involves all kinds of operations, and I will answer your question 
this w&y. Where the man is working on a machine tool, some tool 
where his manual labor really amounts to a considerable number of 
motions and turns during the day, he is lifting and picking and turn¬ 
ing and adjusting all day, he will unquestionably have a greater 
rate of efficiency per hour in an 8-hour day than he has a rate of effi¬ 
ciency per hour in a 10 or a 12 hour day. But where you take big 
tools, like the open-hearth furnaces in which this raw material is 
melted, and where the only labor is to keep the flow of gas and air 
adjusted, and where they are paid for these operations and paid for 
the skill and care—the man must not burn down that furnace—the 
rate of efficiency per hour is no greater in an 8-hour day than in a 
10-hour day. Now, take the big presses on which we forge armor 
plate. There the men are under a little more physical strain—they 
are on their feet, and they have levers to handle, etc.—and there you 
would probably get slightly more efficiency in 8 hours than in 10. 
Take your armor a step further, into the machine shop, and this 
morning we all saw two men under a big drill press watching the 
drill do the work—certainly a nonfatiguing job—and the rate of effi¬ 
ciency for that and similar operations can be no more in an 8-hour 
day than it is in a 10-hour day. Therefore where probably the 
largest amount of your wages is spent you get no more efficiency in 


ARMOR PLANT FOR THE UNITED STATES. 


94 

an 8-hour day than in a 10-hour day, because it does not depend 
upon human labor, but simple watchfulness and being on the job. 

The Chairman. 1 think you told me that these workmen were 
under piecework ? 

Mr. Barba. Well, piecework is rather a bald statement to make, 
Senator, because we have a very great diversity of operations. Piece¬ 
work means that you give a man so much money for doing so much 
work. That is not the most advanced and best way for promoting 
the efficiency of the man. We follow that to a very, very remote 
degree. The system we do follow is what is known as the premium 
rate, which puts a premium upon individual efficiency, paying an 
efficient man more money for the same operation than you do a less 
efficient man for performing the same operation. In that way you 
promote the efficiency of each individual man and not of a class of men. 

The Chairman. If I understand the piecework system, it is to 
stimulate a man's ambition as well as his money-making propensities, 
and impels him, or induces him, to exert himself to the utmost to 
earn as much money as possible. 

Mr. Barba. That again is a more crude statement than the modern 
premium and bonus method should have, because it is the old-fash¬ 
ioned way of simply naming a rate for the job and letting the best 
man win. The better way, which allows each man to work to the 
best of his ability, largely mental rather than physical—because he 
often finds short cuts through every operation in which he is en¬ 
gaged—is the bonus system, where he is paid a bonus over a base if 
he succeeds in doing more work in a given time than the base con¬ 
templated, the base in every case guaranteeing a man his daily wage, 
so that the efficient man gets his day rate over which he earns a large 
bonus. 

The Chairman. That is the same thing stated differently. If a man 
does more work on the piece rate than he does by the day, doesn’t he 
get more compensation ? 

Mr. Barba. Yes. 

The Chairman. And you change it to the bonus system instead of 
the piece system ? 

Mr. Barba. Because it gives each man an added incentive to put 
his best foot foremost and become a competent man on the job. 

Mr. Padgett. In other words, you guarantee him a minimum as 
his day wage, and then you pay him an increase in proportion to his 
efficiency. 

Mr. Barba. Exactly. That is the best statement of that thing 
that one could make. 

Admiral Strauss. That being the case, of course this 50 per cent 
that you claim would not hold; if your wages are made up of a base 
rate plus a premium, if you shorten the hours, as has been done, you 
would not increase the pay 50 per cent, as you stated. 

Mr. Barba. Yes; and more; for the reason that the whole basis 
of the matter which the Senator opened is, as Mr. Padgett stated, the 
guaranty to each of these workmen his day rate. Now, if that man 
is hired at $3 or $4 per day, day rate, that means, on a 10-hour basis, 
40 cents per hour. That means that in 8 hours he is getting $4 just 
the same guaranteed to him, instead of having it guaranteed to him 
in 10 hours. Then on top of that his bonus for efficient work and 
superior production goes at an increased ratio because of his increase 


ARMOR PLANT FOR THE UNITED STATES. 


95 


per hour, because in modern piecework, Senator, the bonus is based on 
the hourly earning capacity of the man; so that a man who is getting 
10 per cent bonus on 40 cents an hour, if his rate is raised to 50 cents 
an hour, his hourly rate becomes 50 cents an hour under the 8-hour 
day; then his bonus instead of being 10 per cent on 40 cents per hour 
becomes 10 per cent on 50 cents per hour. 

The Chairman. You don’t have to stick to that 10 per cent under 
the new law? 

Mr. Barba. We do not have to stick to anything except as de¬ 
manded by working conditions, and the men require that they be 
allowed to make the same weekly pay roll on eight hours that they 
made on the ten-hour day. 

Admiral Strauss. The committee has prepared a list of questions, 
and I will read them. One question has practically been asked you 
before. 

Q. How much does it cost your company to produce a ton of K. C. 
armor, class A-l, f. o. b.; that is, material, labor, and shop overhead 
charges ? 

Mr. Barba. As you say, I have practically answered that question, 
and would ask to be excused from giving this information in so public 
a way. 

Q. How much do you add to this cost for deterioration of plant 
and administration expenses ?—A. I will be glad to answer that ques¬ 
tion so far as my knowledge goes, leaving out the element of admin¬ 
istration expenses, because in our method of keeping costs adminis¬ 
tration expenses are included in the overhead, which is proportioned 
to all of the products of the company in its various lines in accordance 
with the very best judgment that our accountants can apply to the 
amount of the overhead expenditures upon each of these lines of 
manufacture; and without more research thanl have given to it up to 
date I can not tell you how much of the administration expense is 
charged to armor. The depreciation is applied at the rate of 7J per 
cent on tools and machinery, and 2 \ per cent on buildings, but we 
have found that the depreciation on machinery is too low, and begin¬ 
ning with the present fiscal year we shall raise it to 10 per cent on the 
average. 

Admiral Strauss. When you say 10 per cent, do you mean that all 
of your plant here, devoted to the manufacture of armor, would either 
be renewed in 10 years or become obsolete or useless through advances 
made in the business? 

Mr. Barba. No, not at all. The method of cost accounting fol¬ 
lowed throughout the country for some number of years past has been 
to allow a horizontal rate of depreciation. That horizontal rate has 
been 1 \ per cent of machinery, to kill the machinery in approximately 
15 years, and it is perfectly true that much machinery dies in far less 
time than 15 years, while much machinery lives far beyond 15 years, 
and that average has been found to be fair, but lately there has been 
a move, which you, Admiral, at one time called the “ fashion,” to 
raise the average rate of depreciation to 10 per cent. We at Midvale 
have not yielded to the fashion so far as the 10 per cent horizontal 
rate goes, but we are striving so to apportion our rates of depreciation 
for different classes of machinery more in accordance with the actual 
period of their life than has been the case heretofore, and our new rate 


96 


ARMOR PLANT FOR THE UNITED STATES. 


of depreciation beginning the first of November, 1914, for the entire 
plant, not armor alone, will be based upon what we believe to be a 
more rational basis than the horizontal depreciation rate. 

Admiral Strauss. Is there any big tool that you know of that has 
been scrapped since you began the manufacture of armor some ten 
or twelve years ago ? 

Mr. Barba. Completely scrapped? 

Admiral Strauss. Scrapped or become obsolete. 

Mr. Barba. The open-hearth furnaces have been rebuilt several 
times. 

Admiral Strauss. That would happen to any steel-making plant 
as a charge for maintenance. That would not, of course, be included 
in depreciation. 

Mr. Barba. We have several traveling cranes which have been 
entirely overmatched by the increased-weight of plate and have been 
taken out and replaced. 

Admiral Strauss. What did you do with the cranes? 

Mr. Barba. Scrapped them. 

Admiral Strauss. You would not count that rebuilding of your 
furnaces a charge against depreciation. You would call that main¬ 
tenance rather, would you not? That is a charge against produc¬ 
tion, not an extraordinary charge. 

Mr. Barba. The rebuilding of an open-hearth furnace is a thing 
that must be looked for in the natural course of operation, and, so 
far as the mere replacement of the bricks is concerned, it is not a 
serious matter, but when you are required to operate on a special 
product at a high pressure, such as the melting of armor-plate steel 
really is, very much more serious damage is done to the equipment 
in melting armor than in any other class of steel which we have to 
handle; then the rate of depreciation should rise, and we expect it to 
be raised in the future. That, of course, is a mere detail of our in¬ 
ternal bookkeeping, and the answer to your question should .really 
be confined to the horizontal rate of depreciation. 

Admiral Strauss. On tools ? 

Mr. Barba. Yes. 

Admiral Strauss. Cranes ? 

Mr. Barba. Yes. 

Admiral Strauss. How many presses have you ? 

Mr. Barba. Two; one for small forgings and the 10,000-ton press 
for large forgings. 

Admiral Strauss. They are a part of the installation which you 
had when you went into the armor business? 

Mr. Barba. No; the large press was built primarily for armor and 
has been used almost never for any other purpose. 

Admiral Strauss. Was your small press in existence before you 
went into the armor business ? 

Mr. Barba. Yes; it was put in for gun forgings. 

Admiral Strauss. Do you use that in the manufacture of armor? 

Mr. Barba. Just as seldom as the armor press is used for other 
purposes; almost never is the small press used for the manufacture 
of armor. When we first began the test plates and experimental 
work and such small parts were made under the small press. 


ARMOR PLANT FOR THE UNITED STATES. 


97 


Admiral Strauss. You state that it has been your custom to allow 
a depreciation percentage of 7J per cent per annum on your armor 
plant investment ? 

Mr. Barba. Yes. 

Admiral Strauss. What became of this money? Is it a book¬ 
keeping operation ? 

Mr. Barba. In our system of cost keeping and ledger accounting 
we have not applied the depreciation in the normal overhead. We 
have considered depreciation as parallel with capital investment, 
and we depreciate only in a lump sum at the end of the year when 
the ledger balances are taken off. Our depreciation, therefore, 
tends to reduce the capital value of the plant, and as such is fully 
comparable with capital invested, and the inventory value of the plant 
was reduced by the amount of depreciation or write-off, exactly as 
it was increased during the year by the amount of any new invest¬ 
ment made for capital account. 

Admiral Strauss. Then, as I understand it, at the end of 13 years 
from the beginning of this new industry your capital investment in 
the armor production will have been wiped out. 

Mr. Barba. At that rate, yes. 

Admiral Strauss. Approximately. 

Mr. Barba. Yes. 

Admiral Strauss. And the only thing that would exist at the end 
of 13 years would be such new equipment as you have added. 

Mr. Barba. Plus the maintenance that we have given tools not 
actually scrapped, which has been a very large account and in some 
systems of bookkeeping is applied to the capital account. 

Admiral Strauss. You have been in the armor business, since 1903; 
in other words, you have sold armor for 11 years, and barring any 
additions that you have made to your plant at the rate you have 
marked out, it will practically go off your books as capital in about two 
years. 

Mr. Barba. Yes; with the exception that as an offset to the final 
part of your statement must be made all the maintenance charges to 
keep the machinery from being scrapped and thrown out. That is, 
to keep the machinery in a condition of 100 per cent efficiency, which 
is just as necessary in the thirteenth year as it is in the first year. 

Admiral Strauss. But don't you apply this to maintenance rather 
than to depreciation ? That is a daily charge against the production 
of any article that you manufacture ? 

Mr. Barba. As 1 say, there are two systems of thought, two sys¬ 
tems of bookkeeping, and many of them charge major items of main¬ 
tenance to the capital account. We have elected not to do that but to 
put it into our overhead working account. 

Admiral Strauss. Wlien you estimated your selling price of armor 
did you put in this 7J per cent write off ? 

Mr. Barba. I can not answer that now, Admiral. The chances 
are that that was left to the accountants to apply as was the habit of 
bookkeeping then and since, feeling sure that the whole plant would 
be averaged at 7J per cent depreciation at the end of each year, taken 
out of the surplus account and being offset by additions to the same 
account for any new plant or equipment which we might purchase, 
but not, so far as the bookkeeping is concerned, by the addition to 
the capital account of maintenance charges. 

83344—H. Doc. 1620, 63-3-7 


98 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Padgett. Now, may I make a suggestion here. Where you 
oan not answer a question now, will you insert it when the papers 
-come back to you for revision ? 

Mr. Barba. I shall be very glad to do that. 

Mr. Padgett. I should state here, once for all, that where you can 
not give the answer now, you might just say that you will give it later. 

Mr. Barba. Very good. Then we will rely upon the stenographer 
to indicate where the answers are to be supplied. 

Admiral Strauss. He will give you a transcript of this hearing so 
that you can amend your answers, and it may occur to you that in 
some of the cases where you have declined to answer you may, on 
maturer consideration, make up your mind that you will disclose this 
information without prejudicing your interest, and the committee 
would be very glad to get your answers at that time. 

The Chairman. At these other places where we have been there 
have been so many answers from the managers or the witnesses, 
“I don’t know,” that we have felt for their own sakes they ought to 
know because it shows them to be very careless business men in their 
bookkeeping, and while we are not sensitive about your ignorance, 
we would like you to consider these questions at your convenience, 
and if you feel that you can answer them rather than saying “I do 
not know” or “ I do not want to say,” you might put in the answer. 

Mr. Barba. Senator, my personal intention is to answer every 
question that comes within my knowledge. 

The Chairman. I take that for granted. 

Mr. Barba. And I thank you very much for your suggestion, and 
I will be guided by it; and if I find that you want for some particular 
purpose more accurate answer than my memory provides I shall be 
glad to get it for you. 

The Chairman. My idea is that if, as manufacturers, in computing 
costs, you are not taking into consideration those things that we are 
asking you about, which we consider vital to get at the facts, you may 
perhaps change your system of bookkeeping, and hereafter be guided 
by our questions rather than your own judgment. 

Mr. Barba. You must give me credit, also, of remembering that 
you have had time for a careful consideration of your questions 
and- 

The Chairman (interposing). We have done the best we could. 

Mr. Barba. And when your questions come to me you might strike 
something about which I know perfectly, in a general way so far as 
guiding the policies or the management of this company is concerned, 
and for the details of which I necessarily rely upon the men whose 
business it is to have and to know all those details; and in such cases 
if your question requires an answer in detail I shall be very glad to 
furnish it in detail. 

Q. Has this cost been reached by taking the annual output of a 
single year, or of a term of years, and making allowance for rejection 
and ballistic failures ?—A. It will be necessary to answer your question 
in more detail than “yes” or “no,” and if you will bear with me a 
minute I will try to show you how these costs are reached, so that 
if you do get an answer in figures to your first question you will 
know what it refers to and how it is done and governed. The cost 
accounting in this plant is worked out through nearly 40 years on a 
basis which we feel gives us the annual production cost of every one of 


ARMOR PLANT FOR THE UNITED STATES. 


99 


the many lines of manufacture which we produce, and to trace the 
cost of manufacture of armor, or any other line, it can be illustrated 
very briefly by saving that when an order for armor is received and 
cleared for manufacture an order blank is issued with the amount 
and number and every other vital feature of this order upon its face, 
and from that moment every dollar of expense that is incurred in 
the manufacture of that armor is charged to the order number 
which that blank bears, whether it be raw material for the melting 
of the ingot, for repairs to furnace, the locomotive engineer’s time 
for shifting the armor plate around the works, or the carpenter’s time 
in blocking the armor plate on the car for shipment, that order 
number appertains through every channel of work and operation in 
the plant against the direct wa^es and direct material that is expended. 
They are allotted by the auditor, the percentage of administration 
overhead and nonproductive overhead and every contributing cost 
which can not be directly charged to armor is charged up in the 
proportion that the productive labor has occupied (and I may say 
that that method of accounting is a little unfair to products whose 
selling prices per unit are high and in whose manufacture the amount 
of productive wages is low, or that that cost does not fully account for 
all the money which should be charged against the manufacture 
where the proportion of wages to selling price is low). 

Now, on the contrary, where the proportion of wages to selling 
price is high, as is the case, for instance, in the finished gun, then 
that might be overloaded with overhead, whereas armor, where the 
wages compared to the selling price is comparatively low, is under¬ 
loaded with overhead charges, and that we are attempting to correct 
at the present time. 

Admiral Strauss. In making up your cost sheets on the job order 
do your charge in a tool rate? You spoke of the locomotive. Do 
you charge the time of the locomotive engineer, and the fuel, do you 
charge for the coal used in the locomotive ? 

Mr. Barba. We charge a tool rate for the locomotive, based upon 
the time that the engineer is paid wages, and that locomotive tool 
rate comprises the cost of upkeep of the locomotive and the cost of 
coal, water, and every incidental charge which can not be allotted 
save upon the movable basis of the amount of wages paid in produc¬ 
tive labor. 

Admiral Strauss. Do you have tool rates for everything? 

Mr. Barba. Yes. 

Admiral Strauss. For instance, the big planer we saw in the 
machine shop ? 

Mr. Barba. Yes. 

Admiral Strauss. Now, does that tool rate include something for 
the tools finally becoming useless ? 

Mr. Barba. Not in our system of bookkeeping, because the 
depreciation is taken off at the end of the year, and is not taken off 
each tool as the day comes along. 

Admiral Strauss. You do not include in your tool rate the deprecia¬ 
tion of the tool ? 

Mr. Barba. No; the tool rate includes not even the capital 
invested in the tool originally. The tool rate includes the mainte¬ 
nance, the helper, the proportion of the shop it occupies, the power 


100 


ARMOR PLANT FOR THE UNITED STATES. 


which is fed into the tool, and all the multitude of incidental ex¬ 
penses necessary to run that armor machine shop and divided 
amongst the tools operating to produce the product in that shop, 
hut no interest on capital invested, and no depreciation of tool 
equipment is included in our tool rate. 

Admiral Strauss. What does the auditor add for overhead ? 
Doesn’t your tool rate dispose of that? 

Mr. Barba. The tool rate is the means by which the auditor adds 
the overhead to the productive labor going through that tool. That 
is the only channel for the allotment of administration expense. 

Q. What are the various components of this cost per ton?—A. 
Same as to first question. 

Q. What is the cost per ton of the armor ingot at the forge, in¬ 
cluding all rejections?—A. Same as to first question. 

Q. Give the components, with their unit prices, that enter into a 
furnace charge for an armor heat ?—A. I will be glad to supply that 
later, bearing in mind that the cost of the components that enter 
into a charge fluctuate from day to day with the prices of raw mate¬ 
rial in the market. 

Admiral Strauss. We understand that, of course. 

Mr. Barba. Yes. 

Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat?—A. I will be glad to supply that 
later. 

Q. How much does this amount to per ton of armor ingot pro¬ 
duced ?—A. I will be glad to supply that later. 

Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot ?—A. To be supplied. 

Q. What is the fuel charge for each ton of ingot?—A. I have no 
means of knowing accurately enough to make a reply to that ques¬ 
tion. I can only take the amount of coal per ton which is aggre¬ 
gated monthly for the metal passing through a given furnace, and 
this might possibly cover other material than armor. In the case of 
the two big furnaces which we reserve for armor manufacture this 
would be easy to ascertain, hut would not he accurate, because other 
furnaces are occasionally used in the manufacture of a larger ingot 
than one or two of these furnaces could take, and this coal computa¬ 
tion would be inaccurate. 

Q. What is the proportional laboratory superintendence charge for 
each ton of ingot?—A. We have never worked it out in exactly that 
fashion to my knowledge, but if you like I can supply that. 

Q. What is the lifting, stripping, and chipping charge per ton of 
ingot?—A. I would have to give the same answer to that question 
as to the first. When you aggregate all these items you would have the 
production cost. 

Q. What is the power charge, including steam, electric, and water, 
for each ton of ingot?—A. Same as to first question. 

Q. What is the cost of forging ?—A. Same as to first question. 

Q. What scrap allowance is made for condemned ingots?—A. I 
will be glad to supply that. 

Q. How many tons of armor ingots did your company manufacture 
last year ?—A. 1 will have to get the figures to reply accurately, and 
will supply the answer. 


ARMOR PLANT FOR THE UNITED STATES. 


101 


Q. What was the total number of these ingots in tonnage which 
were rejected before reaching the forge?—A. Will supply. 

Q. How many tons of ingots were forged during the past year ?— 
A. Will supply this. 

Q. How many tons were rejected during the forging?—A. Will 
supply this. 

Q; What scrap allowance was made for these rejected during 
forging?—A. We will reserve answer to this question. 

Q. What was the oxidization and scale loss at the forge?—A. Not 
known. Not computed in our cost system because we take the 
original weight of material charged and of ingot we produce, which 
we obtain by weighing the original charge and an estimate of the 
ingot produced thereirom; against this we apply the weight of 
armor in finished form which is shipped on the order, and the differ¬ 
ence is that which is lost during all the various operations included in 
its manufacture, but these are not separated into losses per process. 

Q. What did the labor of forging each ton of ingot amount to ?— 
A. Same as to first question. 

Q. What did the fuel for each ton of ingot forged amount to?— 
A. Same as to first question. 

Q. What did the repairs to heating furnaces amount to for each ton 
of armor ?—A. Same as to first question. 

Q. Wfiat did the electric power, light, steam, water, drafting, trans¬ 
portation, and inspection per ton of plate amount to during the 
forging?—A. Same as to.first question. 

Q. Of all the ingots forged and not rejected, what percentage was 
discarded—how many tons ?—A. Let me ask the meaning of the 
question, because it looks as if it would be easy to reply to that 
question in a way to give you useful information. 

4dmiral Strauss. For tears and cracks and things of that kind. 

Mr. Barba. I will supply the answer to this. 

Q. What allowance was made for the metal thus discarded?—A. 
Same as to first question. 

Q. What is the unit price per ton of plate when ready for carboni¬ 
zing?—A. Same as to first question. 

Q. How many tons of armor plate were carbonized at the works 
of your company last year?—A. Will supply. 

Q. What was the oxidation and scale in this treatment, in tons?— 
A. This was covered in my answer to a previous question as to oxi¬ 
dation and scale loss at the forge. 

Q. What was the total.number of plates rejected during carboni¬ 
zation ?—A. Will supply this answer. 

Q. What does the labor per ton of carbonized plate amount to ?— 
A. Same as to first question. 

Q. What does the material per ton of carbonized plate amount to ?- 
A. Same as to first question. 

Q. How much fuel per ton of plate is used in carbonizing?—A. 
Same as to first question. 

Q. How much did the furnace repairs per ton of carbonized plate 
amount to ?—A. Same as to first question. 

Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, transportation, amount to 
per ton of carbonized plate ?—A. Same as to first question. 


102 


4PV -VB PT AT FOB THE UNITED STATUS. 


Q. How much is the carbonized plate worth per ton without any 
machining i —A. Same as to first question. 

Q. How many tons of armor plate were reforged by your company 
during the past year \ —A. Will supply. 

Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
wor king: the cost of armor ?—A. Will supply. There was an allow¬ 
ance made. The rate will not be disclosed. 

Q. What does the labor per ton for reforging amount to ?—A. 
Same as to first question. 

Q. What do the repairs per ton for reforging amount to ?—A. 
Same as to first question. 

Q. What does the fuel per ton for reforging amount to ?—A. Same 
as to first question. 

Q. What is the proportional amount of power—electric, steam, 
water—for reforging?—A. Same as to first question. 

Q. Wnat does the proportional drafting, inspection, transporta¬ 
tion. and laboratory for reforging amount to ?—A. Same as to first 
question. 

Q. How much discard is made after reforging ?—A. This is a ques¬ 
tion very diffi cult to answer on short notice, because the amount of 
discard after reforging depends solely upon the outline of the plate 
that is to be shaped from the slab produced. During the process of 
referring the material is almost invariablv in the form of a rectangu¬ 
lar slab out of which the outline of the plate finally shaped must be 
cut by discarding the portions of the rectangular slab which over hang 
the outline, and this varies with each plate. 

Admiral Strauss. If you care to answer that question and you have 
the data on your books. I suggest that you take the output for a pe¬ 
riod or for a ship, if you please, and take the whole reforged plate and 
the whole delivered plate. 

Mr. Barba. I shall be glad to answer this question for a given 
group of armor. 

Admiral Strauss. That would be sufficient for any one group, but 
you had better take the output for a ship. 

Mr. Barba. I would suggest that we take the whole contract for 
No. 39. That will take the work of a couple of draftsmen some little 
time, but we shall be glad to furnish that information. 

Admiral Strauss. It would be very desirable for us to get that in¬ 
formation. and if it isn't too much trouble- 

Mr. Barba 'interposing . Let us disregard that : we will give it to 
you. 

The Chairman. That is the battleship that you have already com¬ 
pleted the armor for ? 

Mr. Barba We have just completed that armor. Senator, and we 
have yet to ship only tne two turrets wnich we are manufacturing, 
and that is the armor which you saw in the shop this morning. 

The Chairman. Therefore" it is no trouble to you ? 

Mr. Barba. Just the labor of getting it out : but we will do it. 

Q* What allowance is made for this discard in reckoning the 
cost \ —A. Same as to first question. 

Q. What is the cost of armor per ton after reforging?—A. Same 
as to first question. 






tMfcat ^2 tjts; i-;*:} 


Q. How 2 QAT.T VXfc* tour plk^ V>r> i^cjr, Tto tZtalKrat "vr -T';rL» 
©unman T dormer \cjt ~jw? > rem’ f 

v> tr^aTasenf f 

Ammrii rriAir»*», K<yw nii«i irar plat* mi jm snJLx meaj 
imer jon Jiad r m o5 j r rcz njm izjT hmrcx v.e ine^s- it :nm:iriimi7e t 


w-i 


Mr 3 aki.u Wie wm sspcVr :.-a : zjxmtfKi. 

Q~ fliir maasw tons wot nst 4 n^ omm Ipjt fcpectam *—a 


w oadcf wie-mer or v> ~ .~ is- a maaii KcnSin 

Q '• mi does me Lt '«;r "<er vm <sc mmim: itiit izmtvms ®#1— x 
Sane *s to firs?; q-iesii«n 

y. What docs the Mtcnd per lei of tmtef ploftc aaai tc — 
Mr Ba 2 . 3 a_ Lei ne kri too to ~~;t-~ jei i^i ii i ~t—^ nose. 

Admire i^r^icas. Tm« qinsaoi ne-ms saw Trirar- iLi.vr^L. mi 
yon esc—fire brick.. rliy esc.! 

y C*. — j*.'. ■? *r*T ^i L. k Lt ~ i 1 - ^-! t T- 


Q. Wii: do me i -i i--- -' '. i : ' . - _ :_i*- :m _m — 

— .» _ - * - 

Til.,_e ii *o _~ * n MStMML 

Q. Wn: ik^s the ii-_ rer ' m :i trat'e-i im - - ? — , -r— -; —a_ 
Sum- as to first qrsesticQ- 

Q- Wfcii do IflP - 1 _»I*C 1 L. * '~.L7 -£T^- 7*?7 1 Id -L T7ei«j—‘d liiiie 

1- - . --U t*_' * -\. m. ■"’* ^ T **~ , 4 

Q. Wii* is ‘-It * *i. ti ; ■ ; t_: ;- _-: 

rdzi-f is to nist qnesned. 

Hoot m&QT ions :t im»:r imie iwf sem tc tta ■ • - i~ mnr 

COdDdriT llSl TiiT -A- I Tl jdl ~~ <T - - miw-r - '■* - - --lilULMLT 

- 

ii - ns* ires in i i_m n_i Urn 

. H:~ mi- • :> : i: ._i-: :i't — -ie i i nil _ts _ --m — 

Jl • ill supply. 

Q Were mere ±z.j re;«tt?K dim me pr;«:«ss cl m n hiImii * 
Ii s — m m - : ~ _r. m - * _ * : - - — : . - : : m- it -•. *ei 

■uSrnil in reekmnm me mil < ;ts: —JL V~H ermm I re ee^Bim 
vere mile if se. will sapfxj me we mm m«I xmlc imre; mil- 
eermm me iron: of ill;win-:e- 

^ How m;i rer ton Ices me Labor ec ikmii m. mi m — 

A Svime as to :m c/meii r 

Q. Host inch docs the ■nchingd scrip c—w—i tc —A Has wen 

haBMhdsaasitrtii|HnaBfndsihi^|cdti 4 mifdhr 

remrmrm 

Q. How much decs the nitigrril hrnidhhgMMiiM n.iadcfcf 

dL was;e. i^pan^ cf uvk npffr d t es t: ‘—JL Stine » test 


fKl UCtl. 

^ How muer. do me rviwirs rer :m ec ma*mmec rli:e imocmi :o 
imrds mdkhh| npeniaen $—A. Sane is m fist pahL 

Q W ast do the ptoptrlicaai i h wij.fr par at tf smM plate 
MMSt to . Snm is :o :rs: i 

WVal ia the ro$t par ten « andnai plate paadtewii—A 

rm i to : m: quest tor. 

are the total water, stoat paster, tear putt cnnn. caip a a 
twit drafting, and U'tvwiocy ladaanai^ Sac ns te 

m: auditor 

Q Av hat wero the total ^wdsiptshrTarihallat xaar—Ip 
70 v. : . . I'M s m i . ---. 1 - • - - > . m ■ m ■ • m v • m :r 

v ■ . ; > ; i ' • " 

to 'm: que^tkvt 













104 


ARM OB PLANT FOR THE UNITED STATES. 


Q. And how did you arrive at the method of assigning the various 
proportions to the various operations?—A. We arrive at the method 
of assigning according to the answer given in some detail to a previous 
question regarding method of computing costs. 

Q. The same information is desired for the laboratory, drafting, 
inspection, and transportation charges.—A. The same answer would 
apply. 

Q. What is the cost per ton of shipped plate, class A-2 ?—A. Same 
as to first question. 

Q. What is the cost per ton of class B shipped plate ?—A. Same 
as to first question. 

Q. What was the average cost per ton of class C, steel armor ?— 
A. Same as to first question. 

Q. What do you reckon your working capital to be, capital 
employed in production, not actually invested? For the purpose 
of further answering your question we have made a careful estimate 
as well as a careful research of previous experience. The estimate 
shows that approximately $800,000 of working capital must be 
advanced for a contract similar to that for battleship No. 39. A 
careful research, excluding many assumptions, shows that experience 
has required approximatdy $1,000,000 of outlay to finance a contract 
for the tonnage comprised in the contract for battleship No. 39. 
A. Let me ask you a question on that. Do you refer to the whole 
working capital of the plant? 

Admiral Strauss. No; just to the production of armor. We are 
not trying to get anything else. 

Mr. Barba. It would take some little calculation to reply accu¬ 
rately to your question, and I have no objection to doing it. The 
reason I say it takes some little calculation is that the production of 
armor through the plant is not an average or steady performance. 
It is either a feast or a famine; one year we have plenty, the next 
year we have none, so that the capital actually employed in putting 
armor through the works is different from month to month, and I 
should require to know a little more definitely just what you would 
like to have to answer that question. 

Admiral Strauss. Of course, we understand that during a 2,500- 
ton year, such as has just elapsed, and a full-capacity year- 

Mr. Barba (interposing). Such as we are entering upon. 

Admiral Strauss. The difference in the working capital would be 
very great. But what is meant by the question is that you have to 
buy in advance for your output pig iron, alloys, brick, and various 
other things. Now, taking into consideration the fact that the Gov¬ 
ernment pays you piecemeal as you produce armor, how much capital 
do you have to employ for a full year’s output? 

Mr. Barba. If you will permit me I will reserve answer to that and 
figure upon the year upon which we are entering because it will be 
the only fair basis that can be employed because it looks like a full 
year’s business, and we haven’t had a full year’s business in armor 
since the time of the Oklahoma and Nevada. 

Admiral Strauss. That is comparatively recent, and it might be 
better to take actual figures rather than estimate on the future. For 
instance, you have the experience with that year and can furnish 
it, if you care to, rather than an estimate. 


ARMOR PLANT FOR THE UNITED STATES. 105 

Mr. Barba. Let the answer stand that way, and I will look up the 
figures in the case, and they may be of interest to you. 

The Chairman. Mr. Barba, if the Government should enter upon 
its own armor manufacturing, where would you suggest, as an expe¬ 
rienced manufacturer in the armor business, as the best place for it 
to locate its plant? 

Mr. Barba. You have asked a very important question and one 
which would require very considerable study of the elements that 
enter into the final reason for establishing an armor plant. If you 
were to start fresh and consider building an armor plant for the con¬ 
struction of simply armor for your ships, it would be necessary to 
include a great number of well-known factors on each of which there 
would be quite a number of variables, and you would then have to 
balance those variables to produce the best result, which would indi¬ 
cate the location, generally, that your plant should occupy. Were 
we to start now at Midvale and build a new plant and had no plant 
here, I should say that it would require a study covering some weeks 
before I could give a reasonable answer to your question because of 
this very fact. 

The Chairman. We have letters suggesting that we should look at 
this place and at that place and at the other place; there is a very 
wide interest in this armor-manufacturing business. And the duty 
of this committee is to suggest whether the Government shall go into 
the business at all, and it would be the duty of the Navy Department 
to select a site, considering all the matters that you have suggested. 

Mr. Barba. You see that a comprehensive answer to your question 
would require a great deal of study of the elements entering into it, 
and a great deal of consideration of those elements, and on each of 
those elements you would have wide choice, so that it is almost impos¬ 
sible to answer generally your question except to say, somewhere 
near the east coast. 

The Chairman. If you were handed $10,000,000 or $12,000,000 and 
told to select the best possible site for the Government or for yourself 
and equip it in the best possible way, up to date in every particular, 
where would you locate it ? 

Mr. Barba. Again I must go back and say that it would require 
very serious consideration and much study. 

The Chairman. Have you ever given any consideration at all to 
selling this plant to the Government as a factory ? 

Mr. Barba. The matter has not been seriously proposed to us. 

The Chairman. We are not authorized to seriously propose it to 
you, but still if we should make a suggestion to the Secretary of the 
Navy that the Midvale plant could be bought for such and such an 
amount of money as a nucleus or basis upon which to erect an armor 
factory, what would you say to that idea ? 

Mr. Barba. Well, any proposal such as you have outlined, made 
seriously, would, of course, be given serious consideration. Whether 
the consideration would result in anything affirmative would depend 
wholly upon the owners of the property who were described in a pre¬ 
vious question that you asked me, and as I have not consulted with 
them about the matter, I being only the man who is charged with the 
management of the business of the company, with the getting of the 
business and the selling of its product, I would not pretend to venture 


106 


ARMOR PLANT FOR THE UNITED STATES. 


an opinion upon how the owners would feel about a proposal to sell 
their plant to the Government. 

The Chairman. Are you willing to give any information as to 
what you would consider the property is worth ? 

Mr. Barba. This property? 

The Chairman. Yes. You have already given us your capitaliza¬ 
tion. 

Mr. Barba. Yes. The property has recently been appraised, the 
physical appraisal which we make every once in so many years in 
order to check up our book inventories, and it is quite a number of 
millions of dollars in advance of our capital stock. Without good 
will, the physical value of this plant is approximately $18,000,000. 

The Chairman. Are there any things here that would be unneces¬ 
sary to manufacture armor? 

Mr. Barba. Very many. 

The Chairman. Suppose we left those out and simply bought the 
armor factory. 

Mr. Barba. It is physically impossible. 

Mr. Padgett. They are intermingled ? 

Mr. Barba. You could not conduct your armor factory if you 
were to buy the plant you saw this morning without having a great 
deal of the works contributory to your very existence. 

The Chairman. Well, do you believe, from your experience in the 
manufacture of armor, that it would be better for the Government 
to buy pig iron and manufacture its own steel or to buy the steel ? 

Mr. Barba. Unquestionably my opinion, backed by the experience 
of other governments, is that the Government has no business in 
manufacturing a commodity which is freely offered by its own citi¬ 
zens. The great governments that are using armor do not manufac¬ 
ture it. England manufactures no armor; Russia has a small armor 
plant. Admiral Strauss can tell you more about it than I can, but 
it is our business to know something about it. Russia has a plant 
which is built, equipped, and run by the English armor makers; that 
is the way that Russia gets public utilities, by inducing a concern like 
Vickers-Maxim to build a plant in Russia and operate it on a long 
contract which is very profitable to the people who advance the money 
for the erection of the plant, which this Government does not do. The 
French built a plant some years ago, and to the best of our knowledge 
they have produced no armor at all that you would care to put on 
your ships; nothing of the present thickness required; something like 
6 or 7 inches is the maximum thickness produced. 

Admiral Strauss. Why is it that the French have failed to manu¬ 
facture armor in their own shop? Why could not they succeed in 
manufacturing armor if they choose to do so ? 

Mr. Barba. You can not get, either in France, whose political sys¬ 
tem rather nearly approaches ours, or in this country, can you get a 
staff or personnel to enter into the manufacture of a business like this 
and succeed with it under conditions such as this Government im¬ 
poses upon its employees. You take the staff of the Midvale Steel 
Co., the men who are in charge of it and have been managing the 
affairs of the company; they started here as boys and have grown up 
with a sure tenure of office, depending upon good behavior and effi¬ 
ciency and ability and straight living; and we have all succeeded in 
drawing larger salaries than the Government pays almost any of its 


ARMOR PLANT FOR THE UNITED STATES. 


107 


employees in technical lines, and in my opinion it is impossible to 
expect a federal government to secure the services of such men as 
form the staff of the Midvale Steel Co. to-dav. 

The Chairman. Right there, Mr. Barba—would you mind giving 
this committee the scale of salaries? 

Mr. Barba. I would object to it, Senator; incidentally, Admiral 
Strauss would get jealous of the salaries paid. 

Mr. Padgett. In view of the statement you have made, that if 
you were to state the salaries that were received by the staff of the 
Midvale Steel Co. Admiral Strauss would get jealous, would you 
object to stating whether or not it is a fact that the salaries paid to 
the important officers of these private corporations—the Midvale 
Steel Co., the Bethlehem Steel Co., and the Carnegie Steel Co.—are 
very much higher than the salaries paid to the higher officers in the 
Navy? 

Mr. Barba. Yes, Mr. Padgett; the salaries paid are higher than 
are paid to your bureau chiefs, and these salaries are paid to put these 
particular staff officers on piece work, to spur them exactly as a man 
with a pick and shovel is spurred to his very best endeavor. 

Mr. Padgett. In other words, you get a higher salary as a base 
salary and then you participate in the profits ? 

Mr. Barba. That has not been the plan of this company, but we 
hope that it will become so, because our owners firmly believe in 
the principle of cooperation, and they are trending very strongly 
toward enabling every workman, at least in a leading position, to 
participate in the profit of this company. 

Mr. Padgett. That is the policy pursued by the Bethlehem Steel 
Co., so the president told me. The thing I want to get at was this, 
that the salaries paid, without stating what they are—the salaries 
paid to these principal officers are much higher than the salaries 
paid to a rear admiral in the Navy? 

Mr. Barba. We have a few men whose salaries are higher than 
those paid to a rear admiral in the Navy. 

Q. What does the maintenance of your plant amount to per 
annum?—A. Same as to first question. 

Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture 
and separate from depreciation?—A. I think I will say “same as to 
first question” on that, but it is open to some discussion. 

Q. What is the total of proportional administration charges made 
to armor; how has this been arrived at ?—A. Same as to first question. 

Q. Give a tabulated list showing the various salaries paid, and 
how proportionately divided, so as to include the armor plant.— 
A. Same as to first question. 

Q. How much did the insurance charges on the armor plant 
amount to ?—A. Same as to first question. 

Q. How much taxes are chargeable to the armor plant ?—A. Same 
as to first question. 

Q. How much do you charge to armor in behalf of the pension fund 
and liability fund ? That is, if you have the pension fund you must 
have liabilities for injuries.—A. Same as to first question. We han¬ 
dle our pensions and liabilities in a way that is a little bit peculiar and 
is not charged into the running cost of the plant. It is charged out 
of profit and loss at the end of the year in one lump sum. 


108 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Padgett. You do use that element in fixing your selling price 
of armor? I understand that you use this as one of the component 
elements in fixing your selling price ? 

Mr. Barba. With reference to the pensions, etc., we prefer to 
consider that the owners carry that as their own personal charge. In 
other words, it comes out of the money which is available for distri¬ 
bution and has no particular rate of charge against any portion of the 
plant. 

Admiral Strauss. You mean it is a gratuity ? 

Mr. Barba. It is put on a different basis than it will be in the 
future, when the workman’s compensation act becomes effective. 
The next legislature in Pennsylvania will have a workman’s com¬ 
pensation act; it is one of the most advanced workman’s compen¬ 
sation acts that has been produced, and we strongly supported the one 
that was before the last legislature. It is right that the trade should 
pay for its casualties, and we shall strongly support the bill. 

Q. How much depreciation is charged against the armor plant; 
what is this depreciation; how has it been arrived at?—A. Same as 
to first question. 

Q. After a year’s operations, within which a certain sum of money 
has been set aside from the proceeds of the manufacture of armor 
for depreciation charge, what is done with this money?—A. Same 
as to first question. 

Q. How much money is invested in your armor plant?—A. Ap¬ 
proximately $5,000,000. 

Q. Does this represent the total amount which has been expended 
for this plant, inclusive of all depreciation replacements?—A. I 
would like to reserve an accurate answer to this question, and may 
reply to it fully. [Further answer to question.] In further answer 
to your question asking whether amount expended for plant is in¬ 
clusive of all depreciation and replacements, we beg to state that 
my answer to question 60 exhibits the figures of cost of plant and 
states that this is the book value of the plant to-day, after all depre¬ 
ciation has been written off to date, and that the cost of reproduc¬ 
tion of the existing plant would, therefore, necessarily be much 
higher than this stated book value. 

Q. In reckoning your profit, is it reckoned as a profit on the total 
amount of money which has been put into the armor plant, or on the 
amount which has been put into the armor plant less all depreciation 
which has not been used for the purpose of replacement ?—A. I have 
already made an answer to this question, but in answering it in its 
present form I repeat that depreciation is taken out of the profits 
exactly as is interest on the capital invested taken out of the profits, 
both of them being fairly comparable to interest on capital and to 
the body of the capital account with respect to depreciation. 

Q. What is the capacity of the company’s armor plant in tons per 
year?—A. For cemented armor I would estimate that a full year’s 
output would be 6,000 tons. 

Q. When you state that you have $5,000,000 invested in the pro¬ 
duction of armor, do you include the cost of the site in that sum ?—A. 
Yes; the land is included. 

Q. How many acres are now occupied by your plant? 

Mr. Barba. Do you mean the armor plant? 


ABM OK PLANT FOR THE UNITED STATES. 109 

Admiral Strauss. Yes. Of course, your answer must be aproxi- 
mate. 

Mr. Barba. I shall have to consider that because the land occupied 
by the buildings in which armor alone is produced in no sense repre¬ 
sents the amount of land occupied by the portion of the plant that 
contributes to the operation. 

Mr. Padgett. You stated that you had $5,000,000 invested in 
your armor plant; you then stated that it included the cost of the 
land. Now, then, the land that is included in that estimate of invest¬ 
ment would be the land that would go into it. You can state that, I 
presume ? 

Mr. Barba. Yes. 

The Chairman. How much is land and how much is invested in 
other things ? 

Mr. Padgett. I would thank you to separate these items. 

Mr. Barba. I will try to do that. [Further answer to question.] 
Referring again to the figures answering questions 60 and 222, we 
note that you ask ‘ ‘How much of this figure is land and how much is 
invested in other things ? ” We have taken the land comprised in the 
figure covering the book cost of our armor plant at $125,000, nomi¬ 
nally 15 acres and which is far below the figure at which similar land 
could be purchased to-day. 

Admiral Strauss. One more question: What percentage of fin¬ 
ished armor did you produce from the cast ingot ? 

Mr. Barba. I can answer that question only in the aggregate by 
taking the last armor for No. 38, the Pennsylvania , in which we used 
approximately 15,000,000 pounds of ingots and shipped just under 
5,000,000 pounds of plate. 

Admiral Strauss. Something like 33 per cent ? 

Mr. Barba. The actual shipment being 4,952,000 pounds, I think, 
so that the amount of finished plate for the Pennsylvania contract 
was almost exactly one-third of the weight of ingots originally used. 

Admiral Strauss. Originally cast ? 

Mr. Barba. Yes. 

Mr. Padgett. Now, then, what is the relative weight of the orig¬ 
inal ingot cast compared with the wieght of the original charge that 
went into the furnace—the pig iron, the metal, the raw material? 

Mr. Barba. I shall be glad to get that information for you fairly 
accurately, but it will approximate 10 per cent more for the aggre¬ 
gate weight of raw material charged over the weight of the ingot 
produced. 

Mr. Padgett. Then the weight of the finished product is less than 
33 per cent of the original raw materials that went into the durnace ? 

Mr. Barba. Yes, sir; and the reason is, of course, that there are 
losses within the furnace of the material charged. 

Mr. Padgett. That is what I wanted to get at, and I understand 
that approximates 10 per cent. 

Mr. Barba. That, roughly, is 10 per cent. 

Mr. Padgett. I would like for you to put that in. 

Mr. Barba. Your pig contains 2 per cent of silicon and 3 per cent 
of carbon, and there is 5 per cent of your pig iron that does not pro¬ 
duce ingots; that goes into the slag, and so with many of these ele¬ 
ments. [Further answer.] An examination of the records has found 
that instead of 110 per cent the figure should be approximately 115 


110 


ARMOR PLANT FOR THE UNITED STATES. 


per cent for the amount of material charged to produce 100 per cent 
of ingots. 

Mr. Padgett. In connection with that same question, you have 
this 60 per cent that represents the scrap that comes off of your ingot 
over and above your 30 per cent of finished product; that constitutes 
scrap to go back into your furnace for another ingot, doesn’t it? 

Mr. Barba. Yes. 

Mr. Padgett. What is the proportionate or relative value of that 
material, as scrap, compared with the original material of pig iron 
and all the other elements that go in originally ? 

Mr. Barba. I will answer that question generally and not specif¬ 
ically by stating that the value of this scrap is less than the value of 
the original raw materials for the reason that it is of so special a 
chemical composition that it is more costly to melt down this scrap 
for use in future ingots than it is to take the equivalent of this scrap 
in new materials, to the extent that it would require five or six hours 
to melt a charge of new materials, whereas it would require all the 
way from 10 to 14 hours, depending on the proportions used, of time 
to melt a charge made up of remelted scrap. 

Mr. Padgett. I will ask you to state what it is in this remelted 
scrap that causes this harder process of melting. 

Mr. Barba. It is the high percentage or content of chromium. 
The chromium is necessary to manufacture armor plate to stand the 
present specifications. The armor plate mixture to-day is generally 
a chrome-nickel mixture. The chromium is approximately 2 per 
cent of the whole weight of the finished armor plate. This chromium, 
when introduced back in the furnace in the form of scrap, greatly 
retards the melting of the scrap. It oxidizes and forms a very 
poisonous (that is the term the men use) slag in the furnace, requir¬ 
ing considerable treatment with fluxes and other medicines to correct 
the poison, and in the act of melting down requires at least twice the 
time that scrap not containing chromium requires to be melted. In 
the original production of armor plate metal the chromium is not 
present until 20 minutes before the material is ready to be taken 
from the furnace in finished form; so that when you try to remelt 
your scrap we must contend with the presence of chromium in that 
scrap. 

Mr. Padgett. Now on that point. Is the chromium burned out 
and wasted, or does it chemically form with, and remain with, the 
metal in its remelted form ? 

Mr. Barba. You start with about 2 per cent of chromium in your 
scrap, and use varying proportions of scrap according to the daily 
varying conditions of the furnace, so that the figures are really the 
subject of calculation for each case, but to instance a case, start 
with 2 per cent chromium in the scrap. When the charge is melted 
the chromium will have been reduced to about 1 per cent; then in 
the further operation of pouring and treating the steel the chromium 
will be reduced in an armor-plate furnace to about one-quarter of 1 
per cent, all of it going into the slag in the form of oxide of chromium 
and forming a dry or poisonous slag which, as before stated, requires 
very careful treatment to make a successful operation. 

Mr. Padgett. Suppose you were to use one-half scrap and one- 
half of original pig iron. Would this chromium combine with the 
pig iron or would it go into the slag ? 


ARMOR PLANT FOR THE UNITED STATES. 


Ill 


Mr. Barba. It would first combine with the pig iron and ultimately 
go into the slag in exactly the same proportions as indicated in the 
last answer. 

The Chairman. These details of manufacture are not essential to 
our investigation, and I have a question to ask which is very essential, 
I think. Mr. Barba, one of the elements of cost of armor plate now is 
in the security of the armor manufacturers as to contract. You do 
not know what you are going to get next year. There is no certainty 
about the business. 

Mr. Barba. That is one of the very vital elements, and in the past 
years we have taken our medicine. 

The Chairman. Suppose the Government, having had to pay for 
this uncertainty, should determine to change its policy and should 
endeavor to get at the actual cost of armor plate for itself, with a view 
of entering into contracts for a fixed number of years, say, 10 years. 
If the Government should approach you and offer you work enough 
to keep your factory busy on armor plate according to the Govern¬ 
ment specifications for the next 10 years, what reduction would you 
make from the present prices you are charging ? 

Mr. Barba. You asked a question that became very interesting 
until your last clause, because if the Midvale Steel Co. were offered a 
continuous performance in the production of armor plate you would 
get a reduction under the present price unquestionably, because the 
whole manufacturing could be systematized to a degree which has not 
been possible in the past, and the Government would, and properly 
should, be the gainer by such a condition, but as to the amount of 
reduction under the present price, if I would, I could not answer that 
question accurately, because it is impossible to judge what would be 
the condition under such circumstances. 

The Chairman. If the Government should go into partnership with 
Midvale, would you open your books and institute a system of book¬ 
keeping which would arrive at the actual cost of armor? Would you 
be willing to enter into contract whereby you would be guaranteed 
against loss ? 

Mr. Barba. You have asked a question which I must open up a 
little. Do I understand you to mean that were the Government to 
come to Midvale and enter into partnership with us for 10 years and 
say, “We will guarantee you so much armor a year, or failing to give 
you that armor we will see that your profits are the same,” or offer 
some contract similar to that, we would. 

The Chairman. You would? 

Mr. Barba. Certainly. 

The Chairman. Of course, this is all an excursion into the field 
of possibilities, you know, as to what the Government will do, because 
Congress orders the Secretary of the Navy to do what he does do, and 
he can not do it without the appropriation. So I am only asking this 
question in order to arrive, if I possibly can, at the conclusion which 
I have firmly fixed in my own mind, that in order for the Govern¬ 
ment to be fortified against robbery which I believe it has suffered in 
the past, it is necessary that the Government should build its own 
armor plant. 

Mr. Barba. You commenced a question in which I was getting 
very much interested at once because what you were proposing is 
practically what England has done with her armor makers. 


112 


ARMOR PLANT FOR THE UNITED STATES. 


The Chairman. And Germany with Krupps ? 

Mr. Barba. Germany with Krupps is another story. They prac¬ 
tically own Krupps; they can dictate exactly what they are to do 
with Krupps. That is belief without any sure knowledge, of course. 

Mr. Padgett. Putting the Senator’s question in concrete form, 
if the Government should establish a policy of continuing contracts 
in armor, as is done in “rivers and harbors” improvements, and 
should say to you, we will make a contract for 100,000 tons of armor, 
to be delivered during the next 10 years, divided and apportioned 
among 10 years, would the manufacturers of armor be justified and 
would they, in fact, give a substantial reduction in the price of armor 
below the present prices? 

Mr. Barba. Speaking for this company, you could count on a sub¬ 
stantial reduction in the price of armor under such conditions as 
those because those conditions are most attractive and they are con¬ 
ditions which are the exact opposite of our 10 years’ experience; such 
conditions make a very attractive picture for the future. We would 
agree with the Government on a price and terms and amounts, and 
we would have an assurance of business which would reduce the armor 
business from almost an act of God to an everyday commercial propo¬ 
sition, where it deserves to be. 

Mr. Padgett. I know that Congress is pursuing such a policy with 
regard to the improvement of rivers and harbors. They authorize a 
certain amount and then they appropriate from year to year as the 
work is done, and it just occurred to me that if Congress would pursue 
a policy of that kina, whether the armor makers would be prepared 
to offer a reduction so substantial in character as to make it inviting 
for the Government to pursue that policy instead of the one we have 
now, of year by year. 

Mr. Barba. That is the way the business should really be con¬ 
ducted, unquestionably. Whether or not you could reduce it to the 
concrete terms of 100,000 tons in 10 years is a question that is not 
before the present inquiry. 

Mr. Padgett. Oh, certainly, but I am just speaking of a policy 
along that line. 

The Chairman. The idea was this: The present exorbitant prices 
we are paying are due entirely to the uncertainty of the manufac¬ 
turers, are they not? 

Mr. Barba. The present exorbitant prices, as you term them, are— 
I must deny your premises because I must deny that they are exor¬ 
bitant— 

The Chairman (interposing). We won’t discuss that phase of it. 

Mr. Barba. Senator Tillman, I would like to state with equal force 
and authority with yourself and necessarily with much more intimate 
knowledge of the subject, that the prices that the Government is 
paving for armor are not high and exorbitant prices. I am trying to 
tell you something of that sort now. You had a practically fixed 
policy of two ships a year for quite some time in Congress, and Con¬ 
gress almost legislated the price of armor. If you go back through 
the records you will find that is practically so, and the price of armor 
reached a point of $420 per ton under a policy which gave them the 
armor for two ships a year, and the practice of the department was 
to distribute that armor into equal thirds, as this memorandum 
shows, irrespective of any price they got; but that is beside the point; 



ARMOR PLANT FOR THE UNITED STATES. 113 

the point was that they had practically a definite amount of armor 
for two ships. 

The Chairman. Let us go back there a minute. When Midvale 
first bid on armor and got the contract, and then President Roose¬ 
velt arbitrarily divided it with Carnegie and Bethlehem, was Midvale 
prepared to manufacture all the contract? 

Mr. Barba. They were willing at that time to accept the whole 
16,000 tons. Probably, though, the requirement for speedy delivery 
of armor was not the same as it is to-day, and we might have been 
able to get away with the whole contract at that time. I am free to 
say that to-day we would not, because the shipbuilders have been 
spurred up to a rate of delivery which makes it necessary for Admiral 
Strauss at this time, for the armor for the three ships just let, to 
specify a rate of delivery which will give the shipbuilders no incon¬ 
venience such as he has had in the past. One oi the most laudable 
arrangements that has been put into effect is that schedule of delivery 
by construction groups, and when it was presented to us in June this 
company jumped at it, as the thing to be helped and supported. 
Now, had we, at this time been given a contract for the armor of two 
ships, say 17,000 tons, this company, with its present equipment, 
could in no sense manufacture the armor at the present time at the 
rate which Admiral Strauss requires it, if we had more than the 
armor for one ship. It is going to be nearly all we can do to get the 
armor for one ship in the time specified. The time he has specified 
is much shorter than he would have specified 10 years ago. How¬ 
ever, 10 years ago we would have been glad to have experimented and 
gotten it out somewhere nearly in the time required. 

The Chairman. At $399 a ton ? 

Mr. Barba. Yes, sir. 

Mr. Padgett. Isn’t it a fact that the action of President Roosevelt, 
in declining to award the contract to the Midvale people, they being 
substantially the lowest bidders, and arbitrarily giving two-thirds 
of it to the others, was not the effect of that to destroy any competi¬ 
tion with the bidders, and have they not since then put in substan¬ 
tially identical bids, because they knew that the Government would 
divide it, irrespective of the bids ? 

Mr. Barba. That is essentially true, but the process was a long one; 
in 1900 Midvale bid, and was thrown out. 

Mr. Padgett. What was the bid of the Midvale Co. in that year 
when its bid was thrown out? 

Mr. Barba. It was a sliding-scale bid, according to the tonnage. 

Lieut. Commander Bloch. It was $445 a ton for class A and $400 
a ton for class B. Those terms do not mean the same as they do to¬ 
day. 

Mr. Barba. In 1903 Midvale was a second time the lowest bidder, 
and received a little over one-third of the order. 

Mr. Padgett. And that was the year that you had a plant ? 

Mr. Barba. Yes. In 1905 Midvale was a third time the lowest 
bidder, and was given 1,000 tons out of 8,000 tons. In 1906 Midvale 
was a fourth time the lowest bidder, and received 3,660 tons out of 
7,319 tons. 

Mr. Padgett. That is the time that the split came. 

Mr Barba. No, the time before, in fact both times before. This is 
the third time that we had a split. 

83344—H. Doc. 1620, 63-3-8 


114 


ARMOR PLANT FOR THE UNITED STATES. 


Mr. Padgett. The time I am talking about is the time when the 
administration divided the contract. Since then they have been giv¬ 
ing identical bids, have they not ? 

Mr. Barba. In 1907 Midvale was a fifth time the lowest bidder, and 
bid $410 against Carnegie and Bethlehem bids of $420, and they had 
the royalty. 

The Chairman. What do you mean by royalty ? 

Mr. Barba. The Government paid an additional royalty of $33.60 
on class A and $11.20 on class B per ton on the Krupp patents. 

Admiral Strauss. Which these other two companies were sub¬ 
ject to. 

Mr. Barba. And we were not subject to. Right there is an inter¬ 
esting fact. Immediately after the letting of one-third of that con¬ 
tract to Midvale, three suits were brought against Midvale alleging 
infringement of the Krupp cementing patents and treatment patents. 
These suits we fought up to the Supreme Court and won in every 
court. Immediately after the first judgment was rendered both Car¬ 
negie and Bethlehem were notified by the Government, who had paid 
this royalty as an extra charge over and above the bid price of armor- 

Mr. Padgett (interposing). The bid price was $420 ? 

Mr. Barba. Plus $33.60 a ton. The Government notified them 
that they would no longer pay any royalty, because if Midvale did 
not exact a royalty and had gotten a judgment, the Government 
need not pay, and Midvale was fighting that suit through all the 
courts ana winning it in the courts, and the Government has saved 
$33.60 per ton for all the armor they bought since. 

Mr. Padgett. Not up to date? 

Mr. Barba. Up to the expiration of the patents. 

The Chairman. But for Midvale’s public spirit and unwillingness 
to be robbed by Krupp’s patents, the Government would be paying 
a royalty now ? 

Mr. Barba. The patents have expired. 

The Chairman. When did they expire ? 

Mr. Barba. I will supply that data later. [Further answer to 
question:] I attach a table of the four patents and the expiration 
dates for the American patents and for the German patents; m effect 
the expiration is at the dates of the German patents. 


No. 

Date. 

Expiration. 

American. 

German. 

Krupp patents: 

534178. 

Feb. 12,1895 
Feb. 6,1900 
June 19,1900 
July 10,1900 

Feb. 12,1912 
Feb. 6,1917 
June 19,1917 
July 10,1917 

Dec. 16,1906 
Feb. 28,1907 
Apr. 23,1909 

642926. 

651965. 

653413.. 




Then, again, in November, 1908, Midvale was a sixth time the 
lowest bidder and was awarded one-third of the tonnage. 

Mr. Padgett. Could the Midvale Co. have undertaken more than 
it received? 

Mr. Barba. At that time, yes; because it was not anything like its 
capacity. 


















ARMOR PLANT FOR THE UNITED STATES. 


115 


The Chairman. Mr. Padgett, it seems that all the testimony 
brought out demonstrates clearly that the Government had forced 
this combination of manufacturers: not only encouraged it, but 
compelled it. 

Mr. Padgett. That is what I am bringing out. The policy that 
was pursued by Roosevelt, in refusing to give the award to the lowest 
bidders, finally brought about a condition where there were no lowest 
bidders. Didn’t the three concerns in their letters to Secretary 
Daniels, last year, practically state to him that the reason for identical 
bids was because of the policy hitherto pursued by the Government 
in declining to respect the lowest bids ? 

Mr. Barba. Yes, sir; and immediately after the year of 1907 that 
I spoke of here, the policy was .adopted of dividing the armor into 
equal thirds by the department and reducing the price of the bidders 
to the price bid by the low man. 

The Chairman. Therefore, you got behind the curtain and said, 
What is the use of bidding below each other; let us combine? 

Mr. Barba. That price was simply maintained. It was $420 plus 
royalty, and after the royalty was knocked off $420 was the price from 
that day until the last year, when the eight-hour law advanced the 
price from $420 to $454, which this year was reduced from $454 to 
$440 and for next year to $425, again an official basis, because the con¬ 
tracts for next year, at Secretary Daniels’s request, were all placed at 
the price of the lowest bidder. I would like, Senator, to have this 
prepared statement incorporated it in the hearing. 

The Chairman. You can incorporate in the hearing. 

Mr. Padgett. I will ask you to state if you have prepared and have 
with you a statement giving the history of the manufacture of armor; 
and, if so, will you attach that statement to your hearings as an 
answer to this question? 

Mr. Barba. I have such a statement prepared and shall be glad to 
let it stand as a fuller answer to some of these questions. Incidentally, 
if you will allow me to add- 

Mr. Padgett. You can add anything you want to. 

Mr. Barba. I want to put it in a little better shape. 

Mr. Padgett. You can put it into better shape and then insert it 
in your hearings. 

The Chairman. You see we want a perfectly full and square 
explanation of this whole armor contract business, the cost of manu¬ 
facture, and everything about it. We are very sorry we have not 
been able to get you to act throughout as your instincts must lead 
you to do, for we are certainly impressed with the belief that you are 
an honorable gentleman and would tell us more than you have but 
for the idea you have along with the other armor manufacturers 
that you must keep your secrets to yourself. In effect you are all 
telling the Government, k ‘You have no business to go into armor 
manufacture at all, bec'ause we will make the armor, and are already 
making it at a reasonable price.” If your company would compete 
instead of combining, as I believe you have combined, the Govern¬ 
ment would not need to erect an armor plant at all. But we believe 
you are in a combination to charge the Government an excessive 
price, and that is our trouble. 



116 


ARMOR PLANT FOR THE UNITED STATES. 


STATEMENT OF ME. WILLIAM P. BARBA. 

The Armor Contracts of the Midvale Steel Co. and Data Relating to Armor. 

The Midvale Steel Co., of Philadelphia, made its initial bid for an armor contract 
on August 10, 1900. (See Appendix A for data regarding company.) (Note by Com¬ 
mittee—The Committee is informed that on this date the Midvale Company had no 
armor plant.) 

The United States Navy Department opened on that date bids for about 36,000 tons 
of armor. Midvale bid, net (no royalties demanded), $438 per ton; the Carnegie and 
Bethlehem Steel companies bid, net (including royalties), $490 for class “A” armor. 
Midvale received no award. (See Appendix B for details.) 

In October, 1903, Midvale was a second time the lowest bidder ($398 per ton, net, 
was bid on class A as against $453.60, net, by Carnegie and Bethlehem), on about 
16,000 tons of armor. Midvale received a little over one-third of the order. (See 
Appendix C for details.) 

In January, 1905, Midvale was a third time the lowest, bidding $398 net for class A 
against the Carnegie and Bethlehem bids of $453.60, net. A contingent order for 1,000 
tons out of 8,000 tons was all Midvale received. (See Appendix D.) 

In July, 1906, Midvale was a fourth time the lowest bidder, and received 3,660 tons 
out of 7,319 tons. Midvale bid for class A armor $346, and Carnegie and Bethlehem 
$381 per ton. (See Appendix E.) 

In the summer of 1907 Midvale was a fifth time the lowest, bidding $410 per ton, as 
against the Carnegie and Bethlehem bids of $420 for class A armor. (See Appendix 
F, containing important Government letter and details.) 

To restrain the Midvale Co. from proceeding with its manufacture of armor, in 1907 
three suits were brought against it in the name of Fred. Krupp, Aktien-Gesellschaft. 
Although these suits were bitterly fought, they were lost in every court. The Su¬ 
preme Court of the United States also deciding in favor of the Midvale Steel Co. 
(See Appendix G.) 

On November 9, 1908, Midvale was a sixth time the lowest bidder on the total 
amount of armor of all classes for the Utah and Florida. Midvale was awarded one- 
third of the tonnage required. (See Appendix H.) 

On August 18, 1909, bids for the armor for the Arkansas and Wyoming were opened. 
Midvale was slightly lower on the total of all classes. (See Appendix I.) 

On October 7, 1910, the armor makers were invited to a conference by the Govern¬ 
ment on account of the increasing difficulties and expense in the manufacture of armor. 
(Appendix J.) 

On December 1, 1910, the bids for the armor for the Texas and New York were 
opened. Each manufacturer received practically one-third of the order for the Texas 
armor. (See Appendix K.) 

On November 16, 1911, the Government invited the armor makers to a conference 
in reference to the armor for the Oklahoma and Nevada. 

On January 4, 1912, bids were opened for the Oklahoma and Nevada armor. The 
amount was divided into thirds as nearly as possible. (See Appendix L.) 

On December 18, 1912, the Government invited the armor makers to a conference 
in reference to the armor for the Pennsylvania. 

Bids for the Pennsylvania armor were opened February 18, 1913. Midvale made the 
best bid on every class of armor, and received one-third of the total. (See Appen¬ 
dix M.) 

The armor bids for battleship No. 89 were opened August 27, 1913. The Secretary 
of the Navy had new bids submitted on October 14, 1913, and awarded the whole of 
the contract to Midvale. (See Appendix N.) 

On October 15, 1914, bids were opened by the Secretary of the Navy for approxi¬ 
mately 25,000 tons of armor for battleships 40, 41, and 42, at which time Midvale’s bid 
was the lowest on all classes, except class A, on which class we were underbid by the 
Bethlehem Steel Co., the prices which Midvale bid being for class A armor, $436 per 
ton; for class A-2 armor, $486 per ton; for class B armor, $466 per ton; and for class C 
armor (bolts), $376 per ton. (Note by Committee—The Midvale Company only bid 
for one-third of the armor advertised for. The prices at which awards were subse¬ 
quently made were as follows: Class A, $425 per ton; Class A2, $486 per ton; Class B, 
$466 per ton; Class C, $376 per ton.) 

On October 19, at the invitation of the Secretary of the Navy, the armor makers were 
called into a conference in the office of the Secretary and told that the prices they had 
quoted for armor were too high, and were asked the question why, if $440 per ton was 
the price for the armor for battleship 39, when but 8,500 tons of armor was purchased, 
the price for 25,000 tons of armor should be reduced only to $436 per ton? Midvale’s 
answer to the Secretary was to the effect that the price for armor had practically been 


ARMOR PLANT FOR THE UNITED STATES. 


117 


established by the department on a basis of not less than two ships per year; and when 
but two ships were ordered in between two and three years, we felt that this was but a 
temporary condition, and that, although the price for armor for the reduced quantity 
should be somewhat increased, yet Midvale did not bid an increased price that would 
be commensurate with the reduced tonnage to be passed through the mills. In com¬ 
menting upon this point Secretary Daniels stated that if for the armor for battleship 
S9 such an increase had been proposed he certainly would have opposed it. 

Upon the solicitation of Secretary Daniels the armor makers assembled in his office 
on October 19 were asked to meet again in his office on October 26 and submit new 
bids. 

On October 26 all three armor makers were represented in the office of the Secretary, 
Admiral Strauss being present, together with the Secretary, and Midvale handed the 
Secretary a letter, reducing its price to a figure which was not disclosed at this meet¬ 
ing; but which was $427 per ton for Class A armor, the originally quoted prices being 
maintained for the other classes of armor. On November 2 the Midvale Steel Co. 
received from the Secretary of the Navy a letter offering them the armor for one ship 
(the quantity for which they had bid),' at $425 per ton for Class A-l, as against the 
revised price of $427 per ton, equaling the price offered him by the Bethlehem Steel 
Co., which proposition of the Secretary’s was accepted by the Midvale Steel Co. 

Midvale was thereupon notified of an award of the armor required for one ship, under 
the terms of its original proposal, as modified on October 26 and the Secretary’s letter 
of November 2. 

In 1906 the Midvale Steel Co. made a bid of lire 2,325 ($455.70) (lire=19.6 cents) 
per ton for 2,100 tons of armor for the Italian Government, and were awarded the 
contract. (See Appendix O.) 

The Midvale Steel Co. commenced the manufacture of armor late in 1903, and has 
been in no way a party to the several investigations made by congressional com¬ 
mittees. 

The reasons for the great increase in the cost of manufacturing armor are discussed 
in Appendix P. It will be noted that the armor investigated by the Armor Factory 
Board in 1897 was a very much easier manufacturing proposition than the armor de¬ 
manded by modern requirements and that almost each year in the last decade has 
added to the difficulties, risk, and expense of production. 

The eight-hour law adds greatly to the expenses of the American manufacturer. 
Such a condition imposed upon us and not upon the foreign corporations who are 
asked to compete for the work for our Navy, whether armor or other material, makes 
the competition most unfair to the American, both workman and employer, when 
the contracts are let abroad. England, Germany, and France have refused to pur¬ 
chase armor, guns, or forgings intended for their respective navies unless of domestic 
manufacture. This stand is taken for military as well as patriotic and economic 
reasons. No wise Government will be blind to the military necessity of having 
within its borders suitable well-equipped ordnance works whose services are not 
dependent upon the will of some foreign power. Moreover, the European taxpayer 
will not consent to see his money go into the pockets of foreign workmen in a foreign 
country, but insists that money raised by taxation be used to give work and pros¬ 
perity to his own country. 

The Midvale Steel Co. has had a long and serious struggle to establish itself in the 
manufacture of armor and has spared neither trouble nor expense in the development 
of its processes of manufacture. Many hundreds of thousands of dollars spent in 
experunents and investigations and years of patient scientific research are the means 
by which “Midvale” has been able to successfully manufacture armor and meet and 
overcome the constantly increasing difficulties. This knowledge and experience 
have been quite as costly and are as much the property of the company as some of 
its other and more material assets. 


APPENDIX A. 

Increase in Number of Men and Wages in the Works of the Midvale 

Steel Co. 


Total wages from Jan. 1 to Sept. 1, 1903. 

Average number of men working per day. 

Average wages per day per man. 

Total wages from Jan. 1 to Sept. 1, 1913. 

Average number of men working per day. 

Average wages per day per man... 

Average increase in wages per day per man in 10 years 

Increase in number of men from 1903 to 1913. 

Increase in pay roll from 1903 to 1913. 


per cent.. 

_do_ 

_do_ 


$1,322,488. 96 
3,017 
$2. 07+ 
$2, 635, 058. 75 
4, 860 
$2. 60+ 
25.6 
61 


99.3 











118 


ARMOR PLANT FOR THE UNITED STATES. 


Referring to the difference in wages paid for certain trades in England and the 
United States, as given in Cost of Living in American Towns, Senate Document No. 
22, Sixty-second Congress, a report of an inquiry by the Board of Trade of London, beg 
to submit the following: 

The only comparison made in the above report comes under the head of— 

Engineering trades. 



Wages per week. 

England. 

United 

States. 

Fitters. 

$8.64 

8.64 

8. 64 

9.12 
5.28 

$17.88 
17.88 
20.48 
22.00 
10.50 

Turners. 

Smiths. 

Pattern makers. 

Laborers. 

Average per man per week. 

5)40.32 
8.064 

5)88. 74 
17.748 



From the above it will be seen that the rate of wages paid, coming under engineering 
trades, is 120 per cent higher in this country than in England. 

APPENDIX B. 

Appeal of the Midvale Steel Co. in the Matter of the Rejection Aug. 11, 1900, 

of Its Bid for Armor. 

To the honorable John D. Long, 

Secretary of the Navy. 

The Midvale Steel Co. of Philadelphia, Pa., respectfully states the following facts 
as the basis of an appeal which said company hereby prays from the decision rendered 
by the Hon. Frank W. Hackett, Acting Secretary of the Navy, made in the Navy De¬ 
partment on the 11th day of August, 1900, in the matter of bids for armor plate 
which were opened on August 10, 1900. The decision rejected all bids. 

The Navy Department made proposals for bids for armor plate, a copy of which is 
hereto attached marked “Exhibit A.” 

The Carnegie Steel Co. bid on the Department’s proposals, as shown in the sched¬ 
ule, marked “ Exhibit B,” hereto attached, and also submitted a letter, constituting 
part of its bid, copy of which letter is hereto attached, marked “Exhibit C.” 

The Bethlehem Steel Co. bid on the department’s proposals, as shown by the 
schedule marked “Exhibit B,” and also submitted a letter constituting part of its bid, 
copy of which letter is hereto attached, marked “Exhibit D.” 

It will be noticed that the bids of these two companies were in identical figures, 
each bidding for one-half of the armor to be contracted for. These two companies 
have heretofore been manufacturing armor plate for the Government, and each has its 
plant ready prepared for the manufacture of this material. The time within which 
each of these two companies in its bid proposed to begin deliveries was six months 
after the signing of the contract, the armor to be delivered in each case at the rate of 
300 tons per month. 

Your petitioner, the Midvale Steel Co., the only other bidder for armor, has not a 
plant that would enable it to manufacture now such armor as is required, but it has 
large steel works, and has heretofore been doing, and is now doing, a large busines • in 
the manufacture of steel forms of various kinds. Its proprietors^ understanding that 
the Government desired to procure competition in the manufacture of armor, made a 
careful examination of the subject matter, including calculations of the cost of erecting 
a proper plant, and the time within which the same could be done, and said company 
having prepared itself in all respects to enter the field as a competitor of the two 
aforesaid companies for the manufacture of armor, submitted its bids as shown in the 
schedule marked “Exhibit B,” together with a letter as part thereof, a copy of which 
letter, marked “Exhibit E,” is hereto attached. Petitioner offered to begin deliveries 
within 26 months and to deliver thereafter at the rate of 500 tons per month. 

Petitioner’s bid was, as it understands, in all respects formal and complete and 
accompanied by a certified check for the amount required of bidders, and petitioner 



















ARMOR PLANT FOR THE UNITED STATES. 


119 


is prepared in all respects to show, If it should be required, that it is competent to 
comply with its said offer and bid in every respect. This, however, petitioner assumes 
may be taken for granted, as the action of the Acting Secretary of the Navy, herein¬ 
after adverted to, was not based upon any objection to the formality of petitioner’s 
bid, or the ability of petitioner to comply therewith. Petitioner further states that 
n ^Ti e i°^ ^ ie armor for by it, except that for the Maine class, hereinafter mentioned, 
will be needed before the time when petitioner offered to begin deliveries. 

The amounts of money involved in these biddings were very great, figuring up, 
according to the prices heretofore demanded of the Government for such armor as was 
required in this case, a very large sum total, to wit, over eighteen millions of dollars; 
and at the reduced prices bid by your petitioner, figuring up over fifteen millions of 
dollars. 

0 It was known to the representatives of both the Carnegie Co. and the Bethlehem 
Co., before the biddings in this case, that petitioner would also put in a bid, and it 
was also known to the gentlemen that petitioner was not prepared with a plant, and 
was not therefore able to agree now to furnish a certain part of the armor wanted by 
the Government, to wit, the armor for ships of the Maine class (about 7,200 tons), 
at the time when such armor would be needed, it being understood that some of the 
armor for the vessels of this class would be wanted within about 12 months from the 
date of the bidding. The Carnegie and Bethlehem companies, therefore, as to the 
armor for this Maine class of vessels, possessed an advantage which was well known 
the Midvale Steel Co. could not overcome. If these two companies should, therefore, 
by concert with each other, agree to bid and should bid, each of them for one-half of 
all the armor contained in the proposals of the department, and if each should make 
it a condition that its bid was not binding unless such company should obtain practic¬ 
ally one-half of all the armor desired by the Government, it would be plainly impos¬ 
sible for the Midvale Steel Co. to become a competitor, unless the Government should 
agree to let the Midvale Co. have such portion of the armor as it could undertake to 
furnish within the time needed. Petitioner would be excluded from bidding for the 
whole amount of armor mentioned in the proposal of the Government, because it 
would be impossible for it to erect the large and costly necessary plant and put it 
into operation within less than two years and two months. Petitioner’s estimate of 
time necessary for the erection of such plant was and is 26 months. 

This being the situation, these two companies, the Carnegie and Bethlehem, each 
made it a condition of its bid that it should obtain practically one-half of the armor. 
If, then, the Government should be unwilling to extend the time to two years and two 
months for the beginning of the deliveries of armor for the Maine class, it was plainly 
impossible that the bid of the Midvale Co. for the whole of the armor in classes A and 
B could be accepted; and if the department, after opening all the bids, should reject 
them all, including all those of the Midvale Co., which were much the lowest, the net 
result of this first bidding would be that the two old companies heretofore engaged in 
the manufacture of armor would have gained information as to the prices at which 
their proposed new competitor was willing to manufacture in competition with them 
and would now, having each of them a plant, and thus an advantage of, say, $4,000,000, 
be in a condition to shut petitioner out in future lettings and prevent the department 
securing a competitor with them for the manufacture of armor. Petitioner of course 
saw, before it made its bids, that the ( arnegie and Bethlehem companies would prob¬ 
ably attempt, by attaching to their bids such conditions, to exclude the bid or bids 
of petitioner from being considered by the department. Petitioner therefore did not 
confine itself to bidding for the whole amount of armor, but it submitted separate 
bids, giving the prices at which it would manufacture each of the several quantities 
of armor in classes A and B, as mentioned in the Government’s proposals, including 
also bolts and nuts, as will appear from its bid herewith submitted. 

Petitioner so put in its bids because, according to the circular accompanying the 
department’s proposals for armor, the department would have the right to accept or 
reject, so far as it was concerned, any and every part of any bid. Petitioner had 
hoped to be awarded at least some large portion of the armor in question, because it 
would be able to furnish any and all of the armor called for within the required time 
except the 7,200 tons needed for the ships of the Maine class. 

Under petitioner’s bid and the provisions of the department’s circular, heretofore 
referred to, the department might have awarded petitioner about 24,000 tons of armor 
of class A and about 3,500 tons of armor of class B, all of which would have been 
exclusive of the armor for the Maine class. Petitioner’s bid was substantially and 
greatly lower than the bids of the other two companies, and if the above-named 
amount of armor, to wit, 24,000 tons of class A and 3,500 tons of class B, had been 
awarded petitioner the Government would have saved $1,470,000, as compared with 
the prices at which the two old companies agreed to take the armor of these two 
classes. 


120 


ARMOR PLANT FOR THE UNITED STATES. 


Again, the department might have awarded to the Midvale Steel Co. 20,000 tons 
of class A, for which it had put in a separate straight bid, and by so doing the saving 
to the Government on this amount of armor over the prices asked by the two 
old companies would have been $960,000. The delivery of this armor petitioner 
offered to complete within 40 months after the beginning. The Carnegie and Bethle¬ 
hem companies offered to complete their deliveries of less amounts w thin 50 months 
after beginning. Had either of these two awards, to wit, of 20,000 tons or of 27,500, 
been made to the Midvale Co., the Government might have readvertised as to the 
armor not awarded to petitioner. It will be seen that the Midvale Steel Co. expressed 
in its bid its unwillingness to agree to manufacture less than 20,000 tons of armor, 
and this for the reason that your petitioner could not undertake to erect a plant which 
would cost over $3,000,090 unless it should procure a contract for a large amount of 
armor. This condition attached to the Midvale Co.’s bid is totally unlike the condi- % 
tions attached to the bids of the Carnegie and Bethlehem companies in this, that 
those companies already have their plants erected and ready for operation and 
they have each of them heretofore undertaken to manufacture, and have manufac¬ 
tured, much smaller amounts of armor than 15,000 tons. 

The importance of this matter to your petitioner and to the Government was such 
that petitioner fully expected that before any decision should be made in the matter 
of said bids petitioner would have been heard, and at such hearing petitioner could 
have pointed out, as it has herein undertaken to indicate, the way easily open to 
the Government to accept petitioner’s bid for 20,000 tons of class A, or for 25,000 tons, 
or other larger amount; but this matter was decided by the honorable Acting Secretary 
of the Navy on the 11th day of August, 1900, only a day after the bids were put in, 
without hearing at all from the petitioner and without its ever having been pointed 
out to the honorable Acting Secretary of the Navy, in the papers, so far as petitioner 
has been able to see, that this course might have been taken. 

The prices named by the Carnegie and Bethlehem companies for class A armor at 
this bidding were about $50 per ton less than the prices heretofore generally under¬ 
stood to have been named by them as bottom prices; and the prices named by peti¬ 
tioner for armor of this class were about $102 per ton below such heretofore named prices 
of these two old companies; and petitioner insists that the prices bid by it are fair and 
reasonable, and much lower than such armor has ever at any time been furnished, 
as well as lower than the rate at which the Government could itself manufacture its 
armor; and that by accepting, as hereinabove indicated, the bid or bids of your peti¬ 
tioner, the Government will obtain a competitor in the field of armor manufacturing. 
All the armor heretofore used by the Government for a number of years past has been 
manufactured by the Carnegie and Bethlehem Steel (’os. No other companies since 
those two companies were in the field, say for a period of 10 years, have ever ventured 
to compete with them by making any bona fide bid. The Midvale Steel Co. has 
undertaken to compete with them, risking millions of dollars in the venture, and it 
respectfully submits that its bid or bids should be accepted. 

Petitioner respectfully further submits that the department can not reasonably 
expect ever to bring into the field a new T competitor in the matter of manufacturing 
armor if, when the new aspirant shall have put in a reasonable bid, and one much lower 
than the bids of the old companies, such reasonable bid shall, nevertheless, although 
the Government has full power to accept it, be rejected, and the old companies, 
already provided with plants, shall thus be given still another opportunity with all 
their advantages to drive the new aspirant from the field. 

The honorable Acting Secretary of the Navy has decided to set aside all the bids 
that were submitted on the 10th day of August, 1900, and to readvertise; and from this 
decision the Midvale Steel Co. respectfully takes its appeal to the honorable Secretary 
of the Navy, or, if he should feel that he can not now revise the act of the honorable 
Acting Secretary, then this appeal is to the President of the United States. 

The Midvale Steel Company 
By Herbert & Micou, 

Attorneys. 


APPENDIX C. 


Armor Bids of October, 1903. 

The Midvale Steel Co. bid as follows: 

Class A, $398 per ton net, with no royalty. 

Class B, $393 per ton net, with no royalty. 

Class C, $388 per ton net, with no royalty. 

Class D, $385 per ton net, with no royalty. 


ARMOR PLANT FOR THE UNITED STATES. 


121 


Carnegie s and Bethlehem’s bids were alike, at $420, for class A, and $400 for other 
classes, with royalties aggregating $33.60 per ton for class A armor and $11.20 for class 
13 Thls makes $ 453 - 60 per ton net for class A and $411.20 net for class B armor. 

Middle was awarded a little over one-third of the 16,000 tons (about) required. 
1 he Bethlehem and Carnegie companies were awarded their proportion of the armor 
at their prices, their average being (plus royalties) $450.60, as against an average 
price of $397 bid by Midvale, which asked no royalty. This armor was for the Mis¬ 
sissippi and Idaho. 

APPENDIX D. 

In January, 1905, when bids were opened for about 8,000 tons of armor and each 
maker bid the same price as before (see Appendix C), the same fight was made against 
Midvale getting any portion of the work. The department thereupon ordered a 
board to investigate the probabilities of our being able to keep our obligations under 
the existing contract and any new contracts that might be awarded. Although given 
every assurance as to the company’s ability, the board reported adversely, errone¬ 
ously so, as subsequent event showed. The Secretary of the Navy, Hon. Paul Mor¬ 
ton, finally decided to give Midvale an order for 1,000 tons of the armor last needed, 
comprising superstructure work and turrets for the New Hampshire, North Carolina, 
and Montana, at the figures bid by it. Of course, an utterly unprofitable order. 
The contract was conditioned upon Midvale having fulfilled on March 1, 1906 (11 
months later), all the requirements of the first contract. The balance of the armor 
needed was placed with the Bethlehem and Carnegie at their own figures and with 
the royalties added. 

Midvale “made good ” and was awarded the 1,000 tons referred to above. 

APPENDIX E. 

In July, 1906, bids were again opened for armor. 

The Bethlehem and Carnegie Cos. bid $381 for classes A, B, and C armor and $350 
for class D armor; Midvale’s bid was $346 for class A, $345 for class B, $344 for class 
C, and $343 for class D armor. On this occasion no royalties were specified by the 
Bethlehem and Carnegie Cos., so that the apparent difference between the bids were 
the real differences, and the question of royalties has never again appeared in the 
bidding. 

Falling back on the clause in the appropriation act, “having in view the best results 
and the most expeditious delivery,” the Secretary of the Navy decided to give Mid¬ 
vale only one half of the order and divided the other half between Carnegie and 
Bethlehem, stipulating for the first time that the higher bidders must accept their 
share of the work at the prices of the lowest bidder. Of the 7,319 tons called for at 
this time for the Michigan and South Carolina , Midvale received 3,660 tons. 

$ APPENDIX F. 

In the summer of 1907 bids were opened for the armor required for the Delaware 
and North Dakota. 

Midvale bid $410 per ton, if awarded 3,028 tons; $428 per ton if awarded 5,540 
tons; and 396 tons class C at $410 per ton, and 76 tons of class D at $410 per ton. 

Bethlehem and Carnegie bid $420 for class A armor and $400 for each of the other 
classes. Under date of June 29, 1907, the Bureau of Ordnance wrote us as follows: 

Department of the Navy, 

Bureau of Ordnance, 
Washington, D. C., June 29, 1907. 

Sirs: Referring to the bids opened on the 20th instant for armor required for battle¬ 
ships Nos. 28 and 29: 

1. After an analysis of the bids, the department considers that the price per ton 
offered by the Bethlehem and Carnegie Steel Cos. for classes A, B, C, and D armor, as 
described in the specifications, viz, $420, $400, $400, and $400, respectively, and 
which do not limit the locations to be assigned any portion of the armor, are the lowest 
prices bid. 

2. In consideration, however, of the closeness of the bids, and with a view to en¬ 
couraging the upkeep of your plant, the department proposes to assign you approx¬ 
imately 2,230 tons of the armor bid upon, provided you agree to accept it at the prices 
per ton of the lowest bidders, viz, class A, $420; class B, $400; class C, $400; and 


122 


ARMOR PLANT FOR THE UNITED STATES. 


class D, $400; such total, 2,230 tons (approximately) to be assigned in such propor¬ 
tionate amounts as to difficulties and costs of manufacture as seem fair and equitable. 

3. It is thought that in the event of such possible distribution, the assignment of 
the 2,230 tons (approximately) to you would be about as follows: 

CLASS A. 


Main belt, one side one ship.. 565. 7 

Lower casemate athwartship, one side one ship. 40. 6 

Two barbettes.-. 7 . 547.1 

Lower casemate, one side one ship. 430. 7 

Sides and backs, three turrets. 192.1 

Port plates for three turrets. 75. 8 

- 1, 852. 0 

CLASS B. 

Around gun positions, one side one ship... 83. 4 

Upper casemate diagonal, one side one ship. 39. 8 

Two barbettes. 89.1 

Torpedo direction station, one ship. 5.3 

-— 217. 6 

CLASS C. 

Tops for three turrets (approximately). 79. 5 

Conning tower tube, one ship (approximately). 63. 0 

- 142.5 

CLASS D. 

Bolts and nuts required for the above-mentioned armor (say approx¬ 
imately). 18. 0 18. 0 


2, 230.1 

4. Of the above-mentioned armor, that required for the torpedo directing station 
and conning tower tube may not be assigned under existing specifications, but may 
be readvertised for; in such an event, the approximate amount of armor to be allotted 
you under the proposed assignment would become approximately 2,162 tons. 

5. Referring to the personal interview on this subject yesterday morning of repre¬ 
sentatives of your company with the chief of Bureau of Ordnance, and to their assent 
to the above proposition, this letter is forwarded, as agreed upon, requesting con¬ 
firmation at your earliest convenience. 

Respectfully, 

N. E. Mason, 

Chief of Bureau of Ordnance. 

Midvale Steel Co., 

Philadelphia, Pa. 

(Through Inspector of Ordnance, U. S. N.) 

As the department’s conditions were accepted by Midvale, a contract for 2,259 tons 
was placed with us at an average price of about $416.50 per ton, whereas the company 
had offered to deliver over 3,000 tons at $410 per ton. Had the Navy Department 
chosen to award to Midvale this armor at its low figure and the remainder to its com¬ 
petitors at their price, the saving to the Government would have been large. 

APPENDIX G. 

Consists of: United States Circuit Court of Appeals for the third circuit. Nos. 40, 
41, 42, and 43, March term, 1911. 

Appeal from the Circuit Court of the United States for the Eastern District of Penn¬ 
sylvania. No. 1478. March term, 1911. 

In the United States Court of Appeals for the third circuit. 

Appeals from the Circuit Court of the United States for the Eastern District of 
Pennsylvania. 

Brief of appellee on the expiration of patents during pendency of suits. 

“Opinion fills a small book. Decision is: ‘The decree of the court below will there¬ 
fore be affirmed with costs, but our affirmance of such decree is based on our conclu¬ 
sion that claim five of Patent No. 534178, granted to Albert Schmitz and Emil Ehrens- 
berger, is invalid; that claim one of the Patent No. 642926, granted to Albert Schmitz, 
is invalid; that claims one and three of Patent No. 651965 and claims one and three 
f Patent No. 653413, both granted to Ehrensberger, are not infringed.’ ” 



















ARMOR PLANT FOR THE UNITED STATES. 


123 


APPENDIX H. 

On November 9, 1908, the armor required for the Utah and Florida was bid upon. 
The bids were as follows: 



Class A. 

Class B. 

Class C. 

Class D. 

Total. 

Bethlehem. 

Carnegie. 

Midvale. 

Per ton. 
$420 
420 
420 

Per ton. 
$406 
415 
405 

Per ton. 
$470 
455 
462 

Per ton. 
$503 
600 
512 

Per ton. 
$1,804 
1,890 
1,799 


Here again Midvale’s bid was the lowest received, but the decision of the Navy 
Department was to award each bidder one-third of the work, Midvale’s portion being 
given to it at the figures it bid. 

APPENDIX I. 

Bids for the armor required for the Arkansas and Wyoming were opened August 18, 
1909. The bids were of the same general character as before, with the figure of $420 
remaining unchanged for the Class A armor, but the other classes varying. Midvale 
was again slightly the lowest bidder, yet it received about 800 tons less than either 
of its competitors, for that amount was awarded each of them before the balance was 
divided into thirds. All contracts were made conditional upon agreement by the 
contractors to furnish armor at the lowest price bid for each class by any bidder. 

The bids were as follows: 



Class A. 

Class B. 

Class C. 

Class D. 

Class E. 

Total. 

Bethlehem. 

Per ton. 
$420 
420 
420 

Per ton. 
$418 
420 
415 

Per ton. 
$470 
460 
470 

Per ton. 
$587 
600 
590 

Per ton. 
$503 
600 
512 

Per ton. 
$2,403 
2,500 
2,407 

Carnegie. 

Midvale. 



APPENDIX J. 

To consider the proposed designs for the Texas and New York armor, representatives 
of the armor makers were invited to meet the bureau in a conference on October 7, 
1910. At this conference a full and free discussion was held as to the character of the 
proposed changes and the increased cost that their adoption would involve. (See 
Appendix K). 

APPENDIX K. 

On December 1, 1910, bids on the armor required for the Texas and New York were 
opened. Novel designs had been prepared for the turrets of these two ships, involving 
the manufacture of a number of very difficult and expensive plates, and the revolving 
rings of the fire-control towers, forgings of great size, requiring an immense amount of 
machine work, were to be included in the class D hollow armor forgings. 

In their proposals all the armor makers bid as they had done before on the class A 
armor and made a subdivision of the class A armor for the turrets, for which $60 per 
ton more was asked and they increased the price of the class D armor to cover the 
fire-control rings. 

The armor for the Texas was divided by the department practically into thirds, each 
bidder being obliged to take his quota at the lowest price bid by any of the three 
bidders. 

Owing to the large amount by which the cost of the Florida had exceeded the esti¬ 
mates, the Navy Department was obliged to call for more money, and in making the 
appropriations Congress attached certain new conditions (see naval act Mar. 4, 1911). 
Probably on account of these the Navy Department in awarding the armor for the 
New York, which was done at a subsequent date, for the first time in its history 
awarded all the armor in each class to the lowest bidder in that class—dividing the 






























124 


ARMOR PLANT FOR THE UNITED STATES. 


armor as nearly equally as practicable between the bidders where the figures were the 
same (see Appendix J). The bids were as follows: 



A. 

A (turret). 

C. 

D. 

E. 

Carnegie. 

$420 

420 

$480 

$400 


$518 

Bethlehem. 

480 

470 

$655 

508 

Midvale. 

420 

480 

470 

655 

512 


APPENDIX L. 

On January 4, 1912, bids for the armor required for the Oklahoma and Nevada were 
opened. The bids varied very slightly from those for the New York and Texas , the 
armor was divided very nearly into thirds, and in each class the price of the lowest 
bidder was that at which the contracts were placed. 

The bids were as follows: 



A. 

A (turret). 

B. 

C. 

Carnegie. 

$420 

$480 

$460 

$508 

Bethlehem. 

420 

480 

470 

508 

Midvale. 

420 

480 

470 

508 


APPENDIX M. 

Bids for the armor required for the Pennsylvania were opened February 18, 1913. 

Midvale underbid its competitors on every item, class A, class A for turrets, B, C, 
C bronze, and D; yet the department divided the contracts into practically equal 
parts, obliging its competitors to accept their share of the work at Midvale’s prices, 
no advantage whatever accruing to Midvale from being the lowest bidder. 

The prices at which this contract was placed were as follows: 

Class A, $454. 

Class A turret, $518. 

Class B, $496. 

Class C, $548. 

Class C bronze, $1,875. 

Class D, $708. 

It will be noted that there was an increase in these figures over those previously 
bid, due to the adoption by Congress of the eight-hour law, which considerably in¬ 
creased the cost of manufacture. 

The bids submitted were as follows: 



A. 

A, turret. 

B. 

C. 

D. 

Bronze. 

Carnegie. 

$455.00 
454.65 
454.00 

$520.00 
519.60 
518.00 

$498.00 
497.95 
496.00 

$559.00 
549.91 
548.00 


$1,900.00 

1,884.63 

1,875.00 

Bethlehem. 

$709.04 
708.00 

Midvale. 



APPENDIX N. 

On August 27, 1913, bids were opened for the armor required for battleship No. 89. 
As the armor, except for new specifications, was similar to that for the Pennsylvania, 
“Midvale ” bid exactly the same price that had taken that order. (See Appendix M.) 

The Secretary of the Navy objected to the fact that the Carnegie and Bethlehem 
bids also conformed to prices that had taken the previous contract and were therefore 
uniform with that bid by Midvale. He announced that he would receive new bids 
on October 14, 1913, and would award the whole of the contract to the lowest bidder. 
Midvale on that date made the lowest bid and received the entire order. 

The increased resisting power required of the armor for this ship, as well as the 
increased power to pentrate possessed by the newest type projectiles, which will be 
used to test it, makes us fearful lest the demands of the Navy Department have passed 









































ARMOR PLANT FOR THE UNITED STATES. 


125 


the limits possible in manufacture. The failure of a few plates to pass this ballistic 
or firing test would entail a very great money loss to the company. \ 

These tests are made by the Navy Department at the Indian Head Proving Grounds, 
enormo ! ls mass of steel has not taken an absolutely perfect temper (some 
of these plates weigh as much as 132,500 pounds finished and 186,500 pounds in the 
rough, and finish 10 feet 10inches high, 23 feet long, and 13 inches thick, while others 
have a thickness of 18 inches) a failure, and consequent rejection, is certain. 

. I 1 } these enormous plates not only a triple condition of temper is required, more 
intricate and difficult than good razors or springs receive, but every stage in the long 
and complicated method of manufacture must have reached theoretical perfection 
m order to pass the tests noted above. The successful production of modern armor is 
conceded b all competent persons to be the most difficult problem, entailing the 
greatest risks, that the metallurgist is called upon to meet. 

Midvale’s bid on October 14, 1913, was as follows: 

Class Al, $440; class A2, $504; class B, $482; class C (steel), $534; class C (bronze), 
$1,861; hollow forgings, $694. 

The Carnegie Steel Co. bid: 

Class Al, $447; class A2, $511; class B, $489. 

The Bethlehem Steel Co. bid: 

Class Al, $444; class A2, $508; class B, $486. 

APPENDIX O. 

The Midvale Steel Co. received an additional payment of $14,732.24 made under the 
following clause in the Italian contract, which payments are not made under any of 
the American contracts. 

The following is a translation of that part of the Italian armor contract referred to 
above: 

“Art. 12.— Metal Cut off Cold. 

“When, for the presence of doors, etc., within the perimeter of the plate there is re¬ 
quired the removal of metal from the plate cut to measure, the weight of the metal so 
removed shall be paid to the compan r assuming for a unit price that corresponding 
to the plate finished diminished b" one-fourth, provided always that the metal be 
removed after the operation of final tempering. 

“If, instead, the metal is removed after cementation, but before the final tempering, 
the deduction to be made to the unit contract price shall be made one-half. 

“The same compensation is given when the perimeter of the plate has such a shape 
that the proportion between its superficies and that of the minimum circumscribed 
rectangle is less than 0.9. The weight of the metal that is missing to the completion 
of the aforesaid rectangle will be paid for on the basis of the preceding tariff. 

“The metal taken away from the contour of the plates for the presence of cuts 
intended for the application of hinges shall equally be paid to the company in com¬ 
pensation for the work necessary to the mating of the cuts. 

“The preceding rules are not applicable in connection with the drilling for bolts. 
Nor will there be given compensation for the parts which are removed from the finished 
plates to give to the edges the required inclinations, even if they be discontinued, 
excepting in case of mortises.” * 


APPENDIX P. 

. —^ 

For some years past there has been a steady increase in the cost of armor manu¬ 
facture. Beginning with the Utah and Florida key-ways had to be cut in the abutting 
edges of all plates; on the Texas and New York (bids of December, 1910) the plates 
were made larger and thicker, requiring much new equipment for their production 
and the design of the turrets was radically changed with greatly increased cost of 
manufacture and much necessary outlay for new machinery; beginning with the 
Oklahoma and Nevada new and improved types of armor-piercing projectiles were 
specified for use in testing these plates, requiring a marked increase in their ballistic 
efficiency and a very heavy outlay for the experimental work involved in this improve¬ 
ment; with the Pennsylvania the 8-hour law went into operation under wffiich, as 
most of the processes in armor manufacture are continuous, the maker is compelled to 
pay out 50 per cent more in wages with no increase in production. 

The contract for the armor for the Mississippi was dated December, 1903. The 
average weight of the plates was 15 tons; the maximum weight of one plate was 29$ 
tons. 

The contract for the armor for the Oklahoma was dated January, 1912. The average 
weight of the plates is 33$ tons; the maximum weight of one plate is 50 tons. 


126 


ARMOR PLANT FOR THE UNITED STATES. 


The contract for the armor for the Pennsylvania is dated March, 1913. The average 
weight of the plates is 35£ tons; the maximum weight of one plate is 60 tons. 

These three contracts, covering a period of 10 years, shows the rapid increase in the 
size and weight of all armor. In addition to this, the difficulties and cost of machining 
have been increased by the cutting of vertical keyways and the fitting of plates. In 
the design of turrets, conning towers, uptakes, etc., the number of plates used has 
been reduced and instead of having plain rectangular plates intricate shapes have 
been substituted, which has also increased the cost of machining and assembling. 

First Contract for Armor Plate “Mississippi” and “Idaho,” No. 10 Belt 

Plate. 

Maximum weight and sizes of largest plate, 111" x 9" x 192^"—54,400 lbs. finished 
weight; 118" x 9f" x 228"=74,400 lbs. rough weight. 

Ingot for above=96" x 22£" x 138"=123,600 lbs. 

Port plate for turrets—light in weight on account of large openings, 94A // x 12" x 
228^"=42,000 lbs. finished weight; 101" x 12f" x 252"=92,100 lbs. rough weight. 

Ingot for above=126" x 26^"=160,000 lbs. 

Discard demanded by specifications=25% from top. 

Latest Contract for Armor for “Pennsylvania”—III Barbette Plate. 

Maximum weight and sizes of largest plate, 130£" x 13" x 277"=132,500 lbs. 
finished weight; 142" x 17" x 272"=186,500 lbs. rough weight. 

Ingot for above=61" x 110"=281,600 lbs. 

Port plate for turrets—light in weight on account of large port openings, 145" x 
18" x 232"=106,000 lbs. finished weight; 154" x 22£" x 235"=231,000 lbs. rough 
weight. 

Ingot for above=61" x 110"=343,500 lbs. 

Discard demanded by specifications=25% from top. 

Waste during manufacture based on difference in weight of ingot and finished 
plate=72^% for port plates, and 53% for belt plates. 

(See Appendix N.) 

STATEMENT OF MR. GUILLIAEM AERTSEN. 

Mr. G. Aertsen, being duly sworn, testified as follows: 

1. The Chairman. What is your name ? 

A. Guilliaem Aertsen. 

2. The Chairman. What is your official connection with the Mid¬ 
wale Steel Co. ? 

A. Auditor. 

3. Q. How much does it cost your company f. o. b. to produce a 
ton of K. C. armor, class A-l; that is, material, labor, and shop 
overhead charges?—A. As a confidential employee of the Midvale 
Steel Co., I am not at liberty to disclose such information pertaining 
to its business as is held to be secret and known only to its higher 
officers. I must therefore respectfully decline to answer this question. 

4. Q. How much do you add to this cost for deterioration of plant 
and administration expenses?—A. See answer to question 3. 

5. Q. Has this cost been reached by taking the annual output of a 
single year or of a term of years and making allowance for rejections 
and ballistic failures?—A. See answer to question 3. 

6. Q. What are the various components of this cost per ton?— 
A. See answer to question 3. 

7. Q. What is the cost per ton of the armor ingot at the forge, in¬ 
cluding all rejections?—A. See answer to question 3. 

8. Q. Give the components, with their unit prices, that enter into 
a furnace charge for an armor heat ?—A. Pig iron, steel scrap, metallic 
nickel, ferromanganese, ferrosilicon, ferrochrome (and other alloys 


ARMOR PLANT FOR THE UNITED STATES. 


127 


which may be deemed beneficial), limestone, burnt lime, fluorspar, 
iron ore. The costs, or market values, of these components vary so 
constantly as to make it impossible to give their “unit prices.” 

9. Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat?—A. Ordinarily, during the interval 
between tapping one heat and charging raw materials for the next, 
the furnace is prepared for the next heat at an average cost for labor, 
fuel, and material, amounting to about $25 to $50. This does not 
include the expense for maintenance and general repairs of the furnace 
and other apparatus in the open-hearth plant, which are made peri¬ 
odically or from time to time. 

10. Q. How much does this amount to per ton of armor ingot 
produced?—A. This item would amount to 50 cents or $1 per ton on 
an average. 

11. Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot ?—A. See answer to question 9. The 
cost of preparation of ladles is included in the cost of preparation of 
furnace. 

12. Q. What is the fuel charge for each ton of ingot?—A. See 
answer to question 3. 

13. Q. What is the proportional laboratory superintendence charge 
for each ton of ingot?—A. See answer to question 3. 

14. Q. What is the lifting, stripping, and chipping charge per ton 
of ingot?—A. See answer to question 3. 

15. Q. What is the power charge, including steam, electric, and 
water, for each ton of ingot?—A. See answer to question 3. 

16. Q. What is the cost for forging ?—A. See answer to question 3. 

17. Q. What scrap allowance is made for condemned ingots?—A. 
See answer to question 3. 

18. Q. How many tons of armor ingots did your company manu¬ 
facture last year?—A. From August 1, 1913, to August 1, 1914, 
approximately 12,600 tons. 

19. Q. What was the total number of these ingots in tonnage 
which were rejected before reaching forge?—A. About 75 tons. 

20. Q. How many tons of ingots were forged during the past 
year?—A. From August 1, 1913, to August 1, 1914, approximately 
12,525 tons. 

21. Q. How many tons were rejected during the forging?—A. 
From August 1, 1913, to August 1, 1914, approximately 152 tons. 

22. Q. What scrap allowance was made for these rejected during 
forging?—A. Understanding this question to ask what scrap allow¬ 
ance in value was made, I must refer to my answer to question 3. 

23. Q. What was the oxidation and scale loss at the forge?—A. 
The percentage of loss from oxidation and scale does not appear in 
our cost records. 

24. Q. What did the labor for forging each ton of ingot amount 
to?—A. See answer to question 3. 

25. Q. What did the fuel for each ton of ingot forged amount to ?— 
A. See answer to question 3. 

26. Q. What did the repairs to heating furnaces amount to for 
each ton of armor?—A. See answer to question 3. 

27. Q. What did the electric power, light, steam, water, drafting, 
transportation, and inspection per ton of plate amount to during the 
forging?—A. See answer to question 3. 


128 


ARMOR PLANT FOR THE UNITED STATES. 


28. Of all the ingots forged and not rejected, what percentage was 
discarded? How many tons?—A. Our cost records do not give 
these figures. I beg to refer you to Mr. Francis Bradley's answer to 
this question. 

29. Q. What allowance was made for the metal thus discarded?— 
A. See answer to question 3. 

30. Q. What is the unit price per ton of plate when ready for car¬ 
bonizing?—A. See answer to question 3. 

31. Q. How many tons of armor plate were carbonized at the works 
of your company last year?—A. From August 1, 1913, to August 1, 
1914, approximately 9,640 tons. 

32. Q. What was the oxidization and scale in this treatment in 
tons?—A. The percentage of loss from oxidation and scale does not 
appear in our cost records. 

33. Q. What were the total number of plates rejected during car¬ 
bonization?—A. Our cost records indicate that rejections on this 
account have been practically nothing. 

34. Q. What does the labor per ton of carbonized plate amount 
to?—A. See answer to question 3. 

35. Q. What does the material per ton of carbonized plate amount 
to?—A. See answer to question 3. 

36. Q. How much fuel per ton of plate is used in carbonizing?—A. 
See answer to question 3. 

37. Q. How much did the furnace repairs per ton of carbonized 
plate amount to?—A. See answer to question 3. 

38. Q. What does the proportional amount of steam, electric 
power, lighting, drafting, inspection laboratory, transportation, 
amount to per ton of carbonized plate ?—A. See answer to question 3. 

39. Q. How much is the carbonized plate worth per ton? No 
machining.—A. See answer to question 3. 

40. Q. How many tons of armor plate were reforged by your 
company during the past year?—A. From August 1, 1913, to August 
1, 1914, approximately, 9,105 tons. 

41. Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
working the cost of armor?—A. From August 1, 1913, to August 1, 
1914, approximately 210 tons. See answer to question 22. 

42. Q. What does the labor per ton for reforging amount to?— 
A. See answer to question 3. 

43. Q. What does the repairs per ton for reforging amount to?— 
A. See answer to question 3. 

44. Q. What does the fuel per ton for reforging amount to?—A. 
See answer to question 3. 

45. Q. What is the proportional amount of power—electric, 
steam, water—for reforging?—A. See answer to question 3. 

46. Q. What does the proportional drafting, inspection, transpor¬ 
tation, and laboratory for reforging amount to?—A. See answer to 
question 3. 

47. Q. How much discard is made after reforging?—A. From 
August 1, 1913, to August 1, 1914, approximately 6,320 tons of 
forged plates were machined arid approximately 3,750 tons of ma¬ 
chined plates were shipped; the difference, 2,570 tons, was approxi¬ 
mately the discard. 



ARMOR PLANT FOR THE UNITED STATES. 


129 


48. Q. What allowance is made for this discard in reckoning the 
cost?—A. See answer to question 3. 

49. Q. What is the cost of armor per ton after reforging?—A. See 
answer to question 3. 

50. Q. How many tons of armor plate were sent to treatment by 
your company during the past year?—A. From August 1, 1913, to 
August 1, 1914, approximately 8,520 tons. 

51. Q. How many tons were lost during treatment by rejection?— 
A. From August 1 , 1913, to August 1 , 1914, approximately 250 tons. 

52. Q. What does the labor per ton of treated plate amount to?— 
A. See answer to question 3. 

53. Q. What does the material per ton of treated plate amount to ?— 
A. See answer to question 3. 

54. Q. What do the repairs per ton of treated plate amount to?— 
A. See answer to question 3. 

55. Q. What does the fuel per ton of treated plate amount to?— 
A. See answer to question 3. 

56. Q. What do the proportional charges per ton of treated plate 
amount to?—A. See answer to question 3. 

57. Q. What is the total cost per ton of treated and rectified plate ?— 
A. See answer to question 3. 

58. Q. How many tons of armor plate were sent to machining by 
your company last year?—A. From August 1, 1913, to August 1, 
1914, approximately 6,320 tons. 

59. Q. How many tons of machined plate were produced last year ?— 
A. From August 1, 1913, to August 1, 1914, approximately 3,750 tons. 

60. Q. Were there any rejections during the process of machining; 
if so, how many tons, and what allowance was made for the rejected 
material in reckoning the final cost?—A. From August 1, 1913, to 
August 1, 1914, our cost records show no losses due to machining 
operations. Approximately 423 tons were rejected on account of 
failure in ballistic tests. In regard to allowance for this rejected 
material I must refer you to my answer to question 3. 

61. Q. How much per ton does the labor of machining amount 
to ?—A. See answer to question 3. 

62. Q. How much does the machined scrap amount to?—A. See 
answer to question 3. 

63. Q. How much does the material for machining amount to, 
including oil, waste, repairing of tools, supply of tools?—A. See 
answer to question 3. 

64. Q. How much do the repairs per ton of machined plate amount 
to during the machining operation?—A. See answer to question 3. 

65. Q. What do the proportional charges per ton of machined 
plate amount to?—A. See answer to question 3. 

66. Q. What is the cost per ton of machined plate produced?— 
A. See answer to question 3. 

67. Q. How many tons of machined plate were presented by your 
company for shipment last year?—A. See answer to question 59. 
From August 1, 1913, to August 1, 1914, approximately 3,750 tons. 

68. Q. What does the labor and material for preparation for ship¬ 
ment amount to per ton of finished plate?—A. See answer to ques¬ 
tion 3. 

69. Q. How are the total water, steam power, transportation, 
inspection, drafting, and laboratory charges reckoned?—A. See 
answer to question 3. 

83344—H. Doc. 1620, 63-! 


-9 


130 


ARMOR PLANT FOR THE UNITED STATES. 


70. Q. What were the total power charges for your plant last year— 
by power charges is meant electric power, steam power, water power, 
or producer gas for running engines, as the case may be—and how 
did you arrive at the method of assigning the various proportions to 
the various operations?—A. See answer to question 3. 

71. Q. The same information is desired for the laboratory, draft¬ 
ing, inspection, and transportation charges.—A. See answer to 
question 3. 

72. Q. What is the cost per ton of shipped plate, class A-2?— 
A. See answer to question 3. 

73. Q. What is the cost per ton of shipped plate, class B ?—A. See 
answer to question 3. 

74. Q. What was the average cost per ton of class C steel armor ?— 
A. See answer to question 3. 

75. Q. What do you reckon your working capital to be?—A. 
Understanding this question to apply only to that part of the com¬ 
pany’s working capital which is devoted to armor plate, I would reply 
that the figure will depend upon the size in tonnage and value of the 
armor-plate contract in process at any given time and its proportion 
to other work in process during the same period in other parts of our 
plant. Under ordinary conditions $750,000 to $1,000,000 would be a 
conservative low estimate for working capital. 

76. Q. What does the maintenance of your plant amount to per 
annum?—A. See answer to question 3. 

77. Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture 
and separate from depreciation?—A. See answer to question 3. 

78. Q. What does this maintenance mean; to what is it applied ?— 
A. See answer to question 3. 

79. Q. What is the total of proportional administration charges 
made to armor; how has this been arrived at?—A. See answer to 
question 3. 

80. Q. Gbe a tabulated list showing the various salaries paid, and 
how proportionally divided, so as to include the armor plant ?—A. See 
answer to question 3. 

81. Q. How much did the insurance charges on the armor plant 
amount to?—A. See answer to question 3. 

82. Q. How much taxes are chargeable to the armor plant ?—A. See 
answer to question 3. 

83. Q. How much do you charge to armor in behalf of the pension 
fund and liability fund?—A. See answer to question 3. 

84. Q. How much depreciation is charged against the armor plant; 
what is this depreciation; how has it been arrived at ?—A. See answer 
to question 3. 

85. Q. After a year’s operations within which a certain sum of 
money has been set aside from the proceeds of the manufacture of 
armor for depreciation charge, what is done with this money ?—A. See 
answer to question 3. 

86. Q. After depreciation charge has been made to a year’s opera¬ 
tion, and there have been no replacements of tools, is this amount 
used to amortize the orginal investment?—A. See answer to ques¬ 
tion 3. 


ARMOR PLANT FOR THE UNITED STATES. 


131 


87. Q. Since the erection of your armor plant what has been the 
total amount of depreciation which has been charged into the cost of 
armor?—A. See answer to question 3. 

88. Q. How much, if any, of this sum of money has been actually 
used for the installation of new machinery in place of old, for building 
new buildings, furnaces, etc., in place of old, and has this expenditure 
been added to the capital account?—A. See answer to question 3. 

89. Q. The remainder of this sum which has not been expended, 
has it been used for amortizing any of the original investment?—A. 
See answer to question 3. 

90. Q. How much money is invested in your armor plant?—A. 
See answer to question 3. 

91. Q. Does this represent the total amount which has been ex¬ 
pended for this plant, inclusive of all depreciation replacements ?—A. 
See answer to question 3. 

92. Q. In reckoning your profit, is it reckoned as a profit on the 
total amount of money which has been put into the grmor plant, or on 
the amount which has been put into the armor plant less all depre¬ 
ciation which has not been used for the purpose of replacement ?—A. 
See answer to question 3. 

STATEMENT OF MR. FRANCIS BRADLEY. 

Mr. Francis Bradley, being duly sworn, testified as follows: 

1. The Chairman. What is your name ? 

Answer. Francis Bradley. 

2. The Chairman. What is your official connection with the 
Midvale Steel Co. ? 

. Answer. Superintendent of armor-plate department. 

3. Q. How much does it cost your company f. o. b. to produce a 
ton of K. C. armor, class A-l; that is, material, labor, and shop over¬ 
head charges ?—A. My duties, are the production of armor and the 
cost is outside my sphere. 

4. Q. How much do you add to this cost for deterioration of plant 
and administration expenses?—A. Refer to my answer to question 3. 

5. Q. Has this cost been reached by taking the annual output of a 
single year, or of a term of years, and making allowance for rejections 
and ballistic failures?—A. Refer to my answer to question 3. 

6. Q. What are the various components of this cost per ton?—A. 
Refer to my answer to question 3. 

7. Q. What is the cost per ton of the armor ingot at the forge, 
including all rejections ?—A. Refer to my answer to question 3. 

8. Q. Give the components, wdth their unit prices, that enter into 
a furnace charge for an armor heat?—A. The components of an armor 
ingot heat are pig iron, scrap, metallic nickel, limestone, burnt lime, 
iron ore, fluorspar, ferromanganese, ferrosilicon, and ferrochrome. 
In order to make up for the loss in melting, 15 per cent greater weight 
of ingredients are charged into the furnace than are produced in the 
ingot. The unit price varies so greatly from day to day that it 
would be impossible to give this information. 

9. Q. How much repair and preparation cost for the open-hearth 
furnace is made for each heat?—A. Refer to my answer to question 3. 

10. Q. How much does this amount to per ton of armor ingot 
produced?—A. Refer to my answer to question 3. 


132 


ARMOR PLANT FOR THE UNITED STATES. 


11. Q. How much does the repair and preparation cost of the ladles 
amount to for each ton of ingot?—A. Refer to my answer to ques¬ 
tion 3. 

12. Q. What is the fuel charge for each ton of ingot?—A. Refer 
to my answer to question 3. 

13. Q. What is the proportional laboratory superintendence charge 
for each ton of ingot?—A. Refer to my answer to question 3. 

14. Q. What is the lifting, stripping, and chipping charge per ton 
of ingot?—A. Refer to my answer to question 3. 

15. Q. What is the power charge, including steam, electric and 
water, for each ton of ingot?—A. Refer to my answer to question 3. 

16. Q. What is the cost for forging?—A. Refer to my answer to 
question 3. 

17. Q. What scrap allowance is made for condemned ingots?—A. 
Refer to my answer to question 3. 

18. Q. How many tons of armor ingots did your company manu¬ 
facture last year ?»-A. From August 1, 1913, to August 1, 1914, about 
12,600 tons. 

19. Q. What was the total number of these ingots in tonnage which 
were rejected before reaching forge?—A. About 75 tons rejected. 

20. Q. How many tons of ingots were forged during the past 
year?—A. About 12,525 tons from August 1, 1913, to August 1, 1914. 

21. Q. How many tons were rejected during the forging?—A. 
From August 1, 1913, to August 1, 1914, about 152. 

22. Q. What scrap allowance was made for these rejected during 
forging?—A. Refer to my answer to question 3. 

23. Q. What was the oxidization and scale loss at the forge?—A. 
This is not accurately known but is estimated at 3 per cent for each 
heating. 

24. Q. What did the labor for forging each tone of ingot amount 
to?—A. Refer to my answer to question 3. 

25. Q. What did the fuel for each ton of ingot forged amount 
to?—A. Refer to my answer to question 3. 

26. Q. What did the repairs to heating furnaces amount to for each 
ton of armor?—A. Refer to my answer to question 3. 

27. Q. What did the electric power, light, steam, water, drafting, 
transportation, and inspection per ton of plate amount to during the 
forging?—A. Refer to my answer to question 3. 

28. Q. Of all the ingots forged and not rejected, what percentage 
was discarded ? How many tons ?—A. Seven and one-fourth per cent 
for cracks and tears. This amounted to 910 tons. 

29. Q. What allowance was made for the metal thus discarded?— 
A. Refer to my answer to question 3. 

30. Q. What is the unit price per ton of plate when ready for car¬ 
bonizing?—A. Refer to my answer to question 3. 

31. Q. How many tons of armor plate were carbonized at the works 
of your company last year?—A. From August 1, 1913, to August 1, 
1914, about 9,640 tons. 

32. Q. What was the oxidization and scale in this treatment in 
tons ?—A. Approximately 6 per cent. 

33. Q. What were the total number of plates rejected during car¬ 
bonization?—A. About 125 tons. 

34. Q. What does the labor per ton of carbonized plate amount 
to ?—A. Refer to my answer to question 3. 



ARMOR PLANT EOR THE UNITED STATES. 133 

35. Q. What does the material per ton of carbonized plate amount 
to?—A. Refer to my answer to question 3. 

36. Q. How much fuel per ton of plate is used in carbonizing?—A. 
Refer to my answer to question 3. 

37. Q. How much did the furnace repairs per ton of carbonized 
plate amount to ?—A. Refer to my answer to question 3. 

38. Q. What does the proportional amount of steam, electric power, 
lighting, drafting, inspection, laboratory, transportation, amount to 
per ton of carbonized plate?—A. Refer to my answer to question 3. 

39. Q. How much is the carbonized plate wortji per ton ? No ma¬ 
chining.—A. Refer to my answer to question 3. 

40. Q. How many tons of armor plate were reforged by your com¬ 
pany during the past year?—A. From August 1, 1913, to August 1, 
1914, about 9,105 tons. 

41. Q. How many tons of plate were rejected during the reforging 
process, and was any allowance for the recovered material made in 
working the cost of armor?—A. From August 1, 1913, to August 1, 
1914, 210 tons. I do not know the rate for the allowance made. 

42. Q. What does the labor per ton for reforging amount to ?—A. 
Refer to my answer to question 3. 

43. Q. What does the repairs per ton for reforging amount to?— 
A. Refer to my answer to question 3. 

44. Q. What does the fuel per ton for reforging amount to?—A. 
Refer to my answer to question 3. 

45. Q. What is the proportional amount of power—electric, steam, 
water—for reforging.?—A. Refer to my answer to question 3. 

46. Q. What does the proportional drafting, inspection, transpor¬ 
tation, and laboratory for reforging amount to?—A. Refer to my 
answer to question 3. 

47. Q. How much discard is made after reforging?—A. This ques¬ 
tion is very blind, but as amplified by Admiral Strauss, can best be 
answered by the fact that from August 1, 1913, to August 1, 1914, 
we sent into the machine shop 6,320 tons and shipped 3,750 tons, 
making the amount discarded during this period about 2,570 tons. 

48. Q. What allowance is made for this discard in reckoning the 
cost?—A. Refer to my answer to question 3. 

49. Q. What is the cost of armor per ton after reforging?—A. 
Refer to my answer to question 3. 

50. Q. How many tons of armor plate were sent to treatment by 
your company during the past year?—A. From August 1, 1913, to 
August 1, 1914, about 8,520 tons. 

51. Q. How many tons were lost during treatment by rejection?— 
A. From August 1, 1913, to August 1, 1914, about 250 tons. 

52. Q. What does the labor per ton of treated plate amount to?— 
A. Refer to my answer to question 3. 

53. Q. What does the material per ton of treated plate amount 
to?—A. Refer to my answer to question 3. 

54. Q. What do the repairs per ton of treated plate amount to ?— 
A. Refer to my answer to question 3. 

55. Q. What does the fuel per ton of treated plate amount to ?—A. 
Refer to my answer to question 3. 

56. Q. What do the proportional charges per ton of treated plate 
amount to?—A. Refer to my answer to question 3. 


134 


ARMOR PLANT FOR THE UNITED STATES. 


57. Q. What is the total cost per ton of treated and rectified 
plate?—A. Refer to my answer to question 3. 

58. Q. How many tons of armor plate were sent to machining by 
your company last year?—A. From August 1, 1913, to August 1, 
1914, about 6,320 tons. 

59. Q. How many tons of machined plate were produced last 
year?—A. From August 1, 1913, to August 1, 1914, about 3,750 tons. 

60. Q. Were there any rejections during the process of machining? 
If so, how many tons, and what allowance was made for the rejected 
material in reckoning the final cost?—A. From August 1, 1913, to 
August 1, 1914, there were no plates rejected due to machining; but 
this company suffered a loss of 423 tons due to failure in ballistic tests. 

I have no knowledge of the allowance made for this rejected material. 

61. Q. How much per ton does the labor of machining amount 
to?—A. Refer to my answer to question 3. 

62. Q. How much does the machined scrap amount to ?—A. Refer 
to my answer to question 3. 

63. Q. How much does the material for machining amount to, 
including oil, waste, repairing of tools, supply of tools?—A. Refer to 
my answer to question 3. 

64. Q. How much do the repairs per ton of machined plate amount 
to during the machining operation ?—A. Refer to my answer to ques¬ 
tion 3. 

65. Q. What do the proportional charges per ton of machined 
plate amount to?—A. Refer to my answer to question 3. 

66. Q. What is the cost per ton of machined plate produced?—A. 
Refer to my answer to question 3. 

67. Q. How many tons of machined plate were presented by your 
company for shipment last year?—A. Refer to my answer to ques¬ 
tion 59. 

68. Q. Wbat does the labor and material for preparation for ship¬ 
ment amount to per ton of finished plate?—A. Refer to my answer 
to question 3. 

69. Q. How are the total water, steam-power, transportation, in¬ 
spection, drafting, and laboratory charges reckoned?—A. Refer to 
my answer to question 3. 

70. Q. What were the total power charges for your plant last year 
(by power charges is meant electric power, steam power, water 
power, or producer gas for running engines, as the case may be), and 
how did you arrive at the method of assigning the various propor¬ 
tions to the various operations?—A. Refer to my answer to ques¬ 
tion 3. 

71. Q. The same information is desired for the laboratory, draft¬ 
ing, inspection, and transportation charges.—A. Refer to my answer 
to question 3. 

72. Q. What is the cost per ton of shipped plate, class A-2 ?—A. 
Refer to my answer to question 3. 

73. Q. What is the cost per ton of shipped plate, class B ?—A. Re¬ 
fer to my answer to question 3. 

74. Q. Wdiat was the average cost per ton of class C steel armor?— 
A. Refer to my answer to question 3. 

75. Q. What do you reckon your working capital to be?—A. Refer ‘ 
to my answer to question 3. 


ARMOR PLANT FOR THE UNITED STATES. 135 

76. Q. What does the maintenance of your plant amount to per 
annum ?—A. Refer to my answer to question 3. 

77. Q. Is this amount over and above the repairs which have been 
charged to the various operations comprising the total manufacture, 
and separate from depreciation?—A. Refer to my answer to ques¬ 
tion 3. 

78. Q. What does this maintenance mean; to what is it applied ?— 
A. Refer to my answer to question 3. 

79. Q. What is the total of proportional administration charges 
made to armor; how has this been arrived at ? —A. Refer to my answer 
to question 3. 

80. Q. Give a tabulated list showing the various salaries paid, and 
how proportionately divided, so as to include the armor plant?— 
A. Refer to my answer to question 3. 

81. Q. How much did the insurance charges on the armor plant 
amount to ?—A. Refer to my answer to question 3. 

82. Q. How much taxes are chargeable to the armor plant?— 
A. Refer to my answer to question 3. 

83. Q. How much do you charge to armor in behalf of the pension 
fund and liability fund?—A. Refer to my answer to question 3. 

84. How much depreciation is charged against the armor plant; 
what is this depreciation; how has it been arrived at?—A. Refer to 
my answer to question 3. 

85. Q. After a year’s operations within which a certain sum of 
money has been set aside from the proceeds of the manufacture of 
armor for depreciation charge, what is done with this money ?—A. Re¬ 
fer to my answer to question 3. 

86. Q. After depreciation charge has been made to a year’s oper¬ 
ation, and there have been no replacements of tools, is this amount 
used to amortize the original investment?—A. Refer to my answer 
to question 3. 

87. Q. Since the erection of your armor plant what has been the 
total amount of depreciation which has been charged into the cost 
of armor?—A. Refer to my answer to question 3. 

88. Q. How much, if any, of this sum of money has been actually 
used for the installation of new machinery in place of old, for building 
new buildings, furnaces, etc., in place of old, and has this expendi¬ 
ture been added to the capital account?—A. Refer to my answer to 
question 3. 

89. Q. The remainder of this sum which has not been expended, 
has it been used for amortizing any of the original investment?— 
A. Refer to my answer to question 3. 

90. Q. How much money is invested in your armor plant?—A. 
Refer to my answer to question 3. 

91. Q. Does this represent the total amount which has been 
expended for this plant, inclusive of all depreciation replacements ?— 
A. Refer to my answer to question 3. 

92. Q. In reckoning your profit, is it reckoned as a profit on the 
total amount of money which has been put into the armor plant, or 
on the amount which has been put into the armor plant less all 
depreciation which has not been used for the purpose of replace¬ 
ment?—A. Refer to my answer to question 3. 




APPENDIX B 


MINUTES OF THE COMMITTEE 

































































APPENDIX B. 

MINUTES OF THE COMMITTEE, 


In pursuance of the act of Congress approved June 30, 1914, the 
committee met at 12 o’clock noon, Wednesday, November 18, 1914, 
in the room of the Senate Committee on Naval Affairs. 

Present: Hon. B. R. Tillman, chairman of the Committee on Naval 
Affairs, United States Senate; Hon. L. P. Padgett, M. C., chairman 
of the Committee on Naval Affairs, House of Representatives; Rear 
Admiral Joseph Strauss, United States Navy, Chief of Bureau of Ord¬ 
nance, Navy Department. 

Moved and seconded that Senator B. R. Tillman be made chairman 
of the committee. Motion carried. 

Moved and seconded that Admiral Strauss be made secretary of 
the committee. Motion carried. 

The committee discussed informally various matters with reference 
to its investigation and decided to visit the armor-plate factory of the 
Carnegie Steel Co., Pittsburgh, Pa.; that of the Midvale Steel Co., 
Philadelphia, Pa.; and that of the Bethlehem Steel Co., South Beth¬ 
lehem, Pa. 

At 1.15 p. m. the committee adjourned to meet to-morrow, Thurs¬ 
day, November 19, at 10 o’clock a. m. 


Washington, D. C., November 19, 1914. 
The committee met at 10 a. m., Thursday, November 19, 1914, in 
the room of the Senate Committee on Naval Affairs. 

Present; Hon. B. R. Tillman, chairman; Rear Admiral J. Strauss, 
United States Navy, secretary. 

Hon. L. P. Padgett, M. C., was absent on account of illness. 
Committee adjourned at 10.05 a. m., subject to the call of the 
chairman. 


Washington, D. C., November 22, 1914 • 

On November 22 the committee met on call of the chairman and 
proceeded to Pittsburgh, Pa., arriving on the morning of the 23d. 

The committee met at the Fort Pitt Hotel at 9.15 a. m. 

Present; Hon. B. R. Tillman (chairman) presiding; Hon. L. P. 
Padgett, M. C., and Rear Admiral J. Strauss, United States Navy 
members of the committee. Lieut. Commander C. C. Bloch, United 
States Navy, Mr. J. B. Knight, and Mr. E. S. Theall, assistants to 
the committee. 

The committee then proceeded to the office of the Carnegie Steel 
Co., whence they were taken to the works of the company at Home¬ 
stead, Pa. 


139 




140 


ARMOR PLATE FOR UNITED STATES. 


The committee inspected the open-hearth department and all of 
the works devoted to the manufacture of armor, accompanied by 
Mr. A. C. Dinkey, president of the company, Mr. R. H. Watson, 
assistant general superintendent, and Mr. L. R. Custer, superin¬ 
tendent of the armor department. 

The members of the committee then inspected the plate mill and 
the mill for the manufacture of structural material. 

The committee then proceeded to Pittsburgh and held a meeting 
at the Fort Pitt Hotel. Arrangements were made by which hearings 
were to be held at the office of the Carnegie Steel Co. beginning at 
9 a. m., November 24. 


Pittsburgh, Pa., November 24,191 J. 

The committee proceeded at 9 a. m. to the office of the Carnegie 
Steel Co. and held its hearings. (See Appendix A.) 

The committee met at 7 p. m. at the Fort Pitt Hotel and elected 
Hon. L. P. Padgett, M. C., as vice chairman of the committee. 

The committee left Pittsburgh on the evening of November 24, 
arriving in Philadelphia the morning of the following day and pro¬ 
ceeded at once to South Bethlehem, Pa., arriving there at 10.07 a. m. 


South Bethlelem, Pa., November 25 , 1914- 
The committee inspected the works of the Bethlehem Steel Co., 
accompanied by Mr. E. G. Grace, president, and other officials of the 
Bethlehem Steel Co., and held a hearing in the office of the company 
in the afternoon of that same day, November 25. (See Appendix A.) 

The committee then proceeded to Philadelphia, Pa., arriving there 
that same evening. 


Philadelphia, Pa., November 27 , 1914 
The committee inspected the works of the Midvale Steel Co., 
accompanied by Mr. W. P. Barba, manager, and other officials of the 
company. They then held a hearing in the office of the company. 
(See Appendix A.) 


Philadelphia, Pa., November 28, 1914- 

The committee met at 9.10 a. m. at the Hotel Walton. 

Present: Hon. B. R. Tillman (chairman), presiding; Hon. L. P. 
Padgett, M. C.; and Rear Admiral Joseph Strauss, United States 
Navy, members of the committee. Lieut. Commander C. C. Bloch, 
United States Navy; Mr. J. B. Knight, and Mr. E. S. Theall, assist¬ 
ants to the committee. 

Matters were discussed relative to the future meetings of the com¬ 
mittee. It was determined to take a recess until Tuesday, December 
8, at 2.30 p. m. 

Adjourned. 






ARMOR PLATE FOR UNITED STATES. 


141 


Washington, D. C., December 8,1914. 
The committee met at 2.30 in the office of the chairman. 

Present: Hon. B. R. Tillman (chairman), presiding; Rear Admiral 
Joseph Strauss, United States Navy. 

Hon. L. P. Padgett, M. C., was unavoidably detained by a com¬ 
mittee hearing. 

4he committee adjourned subject to the call of the chairman. 


Philadelphia, Pa., November 28,1914. 

The committee met at 9.10 a. m., at the Hotel Walton. 

Present: Hon. B. R. Tillman (chairman) presiding; Hon. L. P. 
Padgett, M. C., and Rear Admiral Joseph Strauss, United States 
Navy, members of the committee. Lieut. Commander C. C. Bloch, 
United States Navy; Mr. J. B. Knight and Mr. E. S. Theall, assist¬ 
ants to the committee. 

Matters were discussed relative to the future meetings of the com¬ 
mittee. It was determined to take a recess until Tuesday, December 
8, at 2.30 p. m. 

Adjourned. 


Washington, D. C., December 8, 1914 . 
The committee met at 2.30 in the office of the chairman. 

Present: Hon. B. R. Tillman (chairman) presiding; Rear Admiral 
Joseph Strauss, United States Navy. 

Hon. L. P. Padgett, M. C., was unavoidably detained by a com¬ 
mittee hearing. 

The committee adjourned subject to the call of the chairman. 


Washington, D. C., February 1, 1915. 

The committee met at 2 o’clock p. m. at the office of the chairman. 

Present: Hon. B. R. Tillman (chairman) presiding; Hon. L. P. 
Padgett, M. C., and Rear Admiral Joseph Strauss, United States 
Navy, members of the committee. 

At the request of the chairman of the committee Mr. B. J. Morrison, 
of Philadelphia, Pa., appeared before the committee and an informal 
discussion took place, whereupon Mr. Morrison stated that he would 
be ready to appear before the committee at a future date, prepared 
to give testimony under oath. 

Adjourned, subject to call of the chairman. 


Washington, D. C., February 19, 1915. 
The committee met at 2 o’clock p. m. at the office of the chairman. 
Present: Hon. B. R. Tillman (chairman) presiding; Hon. L. P. 
Padgett, M. C., and Rear Admiral Joseph Strauss, members of the 
committee. Lieut. Commander C. C. Bloch, United States Navy, 
assistant to the committee. 

The committee discussed the form of the report and adjourned at 
3.45 p. m. until February 23, 1915, at 2 p. m. 




142 


ARMOR PLATE FOR UNITED STATES. 


Washington, D. C., February 23, 1915. 
The committee met at 2 o’clock p. m. at the office of the chairman. 
Present: Hon. B. R. Tillman (chairman) presiding; Hon. L. P. 
Padgett, M. C., and Rear Admiral Joseph Strauss, United States 
Navy, members of the committee. Lieut. Commander C. C. Bloch, 
United States Navy, assistant to the committee. 

The committee further discussed its report and adjourned at 3.45 
p. m. 


ESTIMATES 


OF 

COST OF ARMOR FACTORIES 

OF 


20,000 AND 10,000 TONS CAPACITY 










SUMMARY OF COST OF ARMOR PLANT. 



10,000-ton 

capacity. 

20,000-ton 

capacity. 

Site, grading and clearing, fence . . 

$28,000 
63,760 
46,875 
169,397 
124,200 
285,000 
35,500 
216,600 
246,650 
34,800 
682,950 

1.777.800 

1.105.800 

1,224,594 

$34,000 
74,000 
71,062 
247,636 
169,300 
457,000 
55,000 
351,525 
442,250 
47,200 
1,057,800 

2.728.500 

1.912.500 
1,744,869 

Office... 

Physical and chemical laboratory. 

Miscellaneous shops and buildings. 

Locomotive house and rolling stock. 

Boiler plant... 

Hydraulic system. 

Electric power house and transmission lines. 

Gas producer house. 

Coal storage and crushing plant. 

Open-hearth plant. . 

Forging and bending shop. 

Cementing and tempering shop... 

Machine sliop... 

Total (exclusive of land). 

6,031,916 
603,191 

9,392,642 

939,264 

10 per cent incidentals, engineering expenses, unforeseen contingencies. 

Grand total. 

6,635,107 

10,331,906 



83344—H. Doc. 1620, 63-3-10 


145 



























DETAILED COST OF ARMOR PLANT. 


146 


ARMOR PLATE FOR UNITED STATES. 


3 

o 


u 

rl 

n tj 
o 3 

O 


co 


I 

P 

a 

8 i 

o ««-, 
1 ° 
§ 


8 8 8 



CO 




CM 

CO 

O 

s 



CM 

CO 

O 


o o o o 

j^OhOOO 
' iO CC CO ‘O CO o 

co ioVTco'*o' 


co 

© 

o 

P 

o 

!>• 


lO 

cm 


CO 

>5 

.a 


>> 

IO 


CM 


CO 

>> 

& 


t>> 

•Q 

»o 

!>■ 


CM 

H 

>> 

rO 

i-H 

>> 

rQ 

o 

lO 


CO O 
O 1-H 


05 He* 
i-H 05 
. CO 
>5 . 

So 

>»■? 

o o 

CO 00 


o 


HN 

CM 

cm 

>% 

rO 

»o 

00 

>» 

po 

8 


o 

H 



s 

t>» 

00 

CO 


o 

8 

kS 


S3 



00 CO CO 


lO 

00 

ccT 

Tjl 


888888 


kO CO *o 


8h 


4-3 rl 
CO 

o P 
o 


■8 


kO 

cm 


CO O 
O 1-H 


o 


z 

a 

p 

d . 

*-.2 

al 

O **H 

•*-« Q 

I 

© 


« 


s 

*H 

o 

P 


CO 

p 

s 

>» 

p0 


CO 

>> 

p0 

s 

>> 

p0 


5-< •>—i 


a 


CO 

pd 

o 

o 

o 

a 

P 

CO 

a 


P 

i 

5h 

p 

M 


CO 

pd 

o 

o 

Q 

a 

P 

CO 

p 


P 

P 

© 

5h 

p 

pq 


© 

o 

a 


T3 

5-< 

o 


s-t 

o 


& o o 


a 

CD 


w 

CO 

p 

w 

◄ 

d 

w 

fc 

w 

o 

d 

o 

d 


d 

O 

44> 

P 
© 
o 

d 

o 

CO 

f 3 

d 

© 

p< 

-Sa 
si 

r—< O 

o 

r-H 

d 5 

P Xj 
bX)2 

•9r^ O 

73^2 CD 

c3 g d 

5-« P <D 

O Pd 


d 

o 


CO 

© 

cd 


P'dnd 

5 d d 

Socj 


w 

u 

E 

d 

o 


CD 

CD ^ 

e. 9 ag 

°wa 

• - CD ^ tJD 
CD rH iH.Jh 
co^J 

o fl d 

>H 4) 


o 


>> 

C3 

CO 


(H 

p^ 


c3 

o 

H 


3^ 


bX)C bJO * 1 

d »h 


d 

o 

d 


I 

p 


O Cuo 

^.a 

• .STJ 

OT • -,£h 3 

tisc-t! tis 
.ogggpi 

s’ .fa 

TJ 5 O 2 & 

DrS CUC P.Q1 

PQ W 


c3 

4H 

o 


>-< 

tf 

o 

e* 

d 

o 

CQ 

◄ 

o 


w 

s 

o 

Q 

<1 

o 

HH 

CO 

k* 

w 

d 


tJO 

.g 

-4^> 

c3 

CD 

pd 

Cxo 

.g 

Tl 

p 

r—H 

o 

.a 


bo 


if-9 

OpO 

g 


(M 

p-H 

>> 

pO 

>> 

pO 


05 HIM 
P-H 05 

^ o 

>>*? 


CM 


CM 

CM 

pO 

lo 

00 

K*^ 

pO 


CO 

pd 

o 

o 

Q 

T5 

d 

03 

CO 

'p 

c3 


p 

p 

<D 

(-1 

p 


CO 

pd 

O 

o 

Q 

*p 

d 

3 

CO 

"p 

Lh 

p 


p 

p 

<D 

J-H 

p 

pq 


X3 
p 
>H 

> 

p 

5? 

d 

o 

cxo 

o| 

, tH »d 

w CO 

p 


t- 

po 


4-5 

d 

<D 


CD 

a 


4-5 

d 

CD 

g 

a 

•l—> 

p 

<D 

>> 


b ua-&3 

P'd.a-g,^ 

3 ® O 


CO 3 p- 

c5, P o' 

. bJD, 
be 


pO 

p 


3-91®^ 

d 4-5 .d p CD 


"ppd d s 
n3 beP p 


p 

4H 

o 


p- 


/CD 

i H 


^ rl 


CO 

>> 


CO 

o 

HH 

Q 

H 

>-H 

p 

PQ 

Q 

z 

<1 

CO 

PD 

o 

w 

GO 

00 

p 

o 

w 

J? 


h4 

w 

o 

CO 


pd 

CD 

•pH 

S-H 

& 

U-i 

o 

4-^ 

CO 

I 

CM 

c£ 

o 


pd 

o 

•H 

pO 

>> 

5-i 

o 

4-5 

CO 


0< 


CO 


CD 

CO 

p 

o 

pd 

'o 

o 

Eh 


^ '1^4^ ra 
QP . cP d 

2 2q>2’3m- 

d pP - ^ a * 1 

W CO 

.&pd 

p.g 
cnx: 

Wpqi 


CJ H W 

siy 


d y CO a 

































































































ARMOR PLATE FOR UNITED STATES. 



8 888 



tO 


CD 

CM 


8 

88888888888 

8 

888 

8 

8 

CD 

S 

§§§§§§§§§§§ 

8 

CO 

» ^ 

Pv 



05 Tt< 05 tO CD O CD 06 tO 

1-H T -4 

oT 

CD 

H 

00 t ^ 0 

CO tD 

H <N 

(N 

(M 

tO 



CT> tO 


CO 


•0 

& 

§ 

o 

00 


I 

JP 

o 

44 ) 

•H 

E* 

CO 

T* 

a 

c3 

CO . 

<D CO 

o *-< 01 

O >> 

CO o 
CO ^ 


o 

CO 

Xi 


CO 

p 

o 

•pH 

4-> 

c<3 

4-> 

CO 

o 


to 

>> 

rO 


t>> 

& 



<D fl o 

8-s|# 

•2gA8 


CO 


o 

00 CO to (N (N 





05 

CO 

p* 

05 

CD 


88888888888 


CDCOtO^^O^cDcDOitO 
i-H *-H to 


TiT 


888 8 


s s 8 


to 


CD 



CD 


05 to 


«o 

>> 

■Q 

o 

•** 

,0 

8 




o 

CO 

s 

>> 

8 


CO 

a 

o 

•*—4 
4-> 

C3 

-*4» 

CO 

CD 


tO 

t>> 

rO 


>» 

,Q 

to 



C^rH ^(NrH Tf CQHfH 



CO 

If 

o 

o 

o 


CO 


<D 


h3 

P „ „ 
c3 c$ c3 
co C .. 

•d'd'd 
C 3 o 
&H 


O T3 

a 


S 

!>< 


<=> o ° 


P 

c5 


p 

c3. 


W ^ W 

<D % a> *P 
l-H ft U, 


<0 

o 

a 

1 

13 


l-H 

o 

-1-2 

o 

a 

ft 


o 

tJ 


o 


03 

5h 

>> 

c3 

55 

a 

o 

4-2 

b£ 

.s 

3 

CO 

c3 


. . 

a : : 

• • • g 

: p g : 

p 


a : : 

i ! ! c3 

. 0 a 

c3 

> • 

• • 

co • • 

—H • ( 

• • • CO 

• • • 

: fcis : 

CO 

9^4 


CO 

M 

o 

5 tj 

Q S 

p 

03 

CO 


oti 

s.g ^ 

C3 ** 

£2^ 

H * 


CO 

•9 

o 

o 

Q 


S 

5h 


f-H 

a> 


§ o 


03 h w 

£ «£ 


• 

o3 

o 

a 

o 


>> 

M , 

O co 

44 rt 

v : § 

C^J , 53 . 

-4.3 c3 

§s-e 


<D 


s ^ 3' 
5 

co WOt 


o 

•-h 

fH 

.O 

>> 

Ih 

o 

4-3 

CO 

<N 

l-H „ 

03 tX t* 

P -P rl 

0) 44 03 

ft^J £ 

.CO be 1-4 


n Q W W 


i co 
<x> 

p 

O 

ft 


o 

C 3 

l 0 

* 


CO 

r* 

o 

o 


>& 


JS 

o 

o 


M 

o 

o 

ft 


m 


S 

<D 

+-> 

CO 

>> 

CO 


c3 

44 ) 

O 

Eh 


CxG 

P 


c3 

a 


CO 

o> 

> 


CO 


o 

a 

. . o 

•3 o o 

Poo 




CO 

H 

c3 

O 



r^H O 03 ^ o C3 


WfQO 


147 


1 Per square foot. 






















































































































Detailed cost of armor plant —Continued. 


148 ARMOR PLATE FOR UNITED STATES. 































































































COAL STOEAGE AND 


ARMOR PLATE FOR UNITED STATES. 



149 


1 Square foot. * Per producer. * $0.03 per pound. 









































































































Detailed cost of armor plant —Continued. 


150 


ARMOR PLATE FOR UNITED STATES. 


o 

H 


88888 




a. 


•*» 
co 3 
O 3 

O 




© 

42 

a 

h 

O v-» 

*3 ^ 

g 

© 


8 . 

»o 

£o> 

t>vp 

42_ 


5 


CO <N 

,3 43 

JS ,-g 

^ >> ^ >i 

_r.g ef.S 

ll«g 

® o 3 o ® 
3 +* o +* 3 

oho 


1C 

t4 

oof 

Xt« 



;§r!| 

O El eh 


>> 

42 


O I_ 

CO o 

fl 


o 

H 


00 

of 


o o o 
O' o o 

OlOO 

(NNO 
NCO O 
H 00 



§ 


8 



P<+j 

■*j‘3 

gS 

o 


o o o 

888 



o 

o 


888 

o o o 


© 

a 

3 

Ss 
° *2 
CO 3 

3 3 

O t —i 

To ® 

3 

© 


t>> 

42 

O 


*o 


r3 . 

<N >, 
t>>42 

o 
o a 
o 
CO 


o 

• -t 

co uj H 


o A 

8 <M 

5 § 

~ t. 

-03 n d 

fl —' 0—1 
0 = *fZ3 fl 

8 30 pj -m 
O 03’-' 

(n ^ © _j>: 

© O >1 o ® 

OHO 


t>> 

42 


>> 

42 . 

d >> 
>.42 

•° O 
O 03 

o oo 

CO t-H 


3 

o 


42 

3 

O 

■3 


3 3 

o . • o 

•2 >»+f 


ca^oa.^ 

^ 3 3 co 
« _ x - 1 

® 3 9 3 ® 
3 3 £ cS 3 

OHO 


>> 

42 

co 

_ <D 
CO o 

te o 
Eh 


M 

o 

o 

o 

3 

3 

e8 

co 

3 

c3 


pq 


3 

cj 

3 

3 


oci 

iis 

5 :a 


o 

3 


3 

<3 

3 

3 


2ooo 

23 3 3 


44 


3 

3 

c3 


3 

%-i 

o 

3 

c3 

® 

a 

m 


3 

09 

3 

3 


a 


3 

3 

a 

a 


3 

C9 

3 

3 

<- 

o 

V. 

o 


« o o 

0,3 3 


bico ^ 

« V- 4-H 

© o> 

+3 <d • - 


•,a a ft 

• T © 0 


© 


fl 

s 


33 

Bf 

o ^ 


o 

o 

8 

3 

c3 

C 

o 


ft 


Ph 


•2 «8 


3 co 

O ® 

f m M 

a £.2 

. ® P-Pc 

£?£»» 

4 -p 2 *a r/ r 
3 te m o 
j ® o d • 

• i fl(jj S3 
So ® . gjS 

3 H—I PH CO pj 

3 £ §.2 g 

i Ph o 


3. W) 

2 3 

•pH *pH 

^ a 

© o 

a a 

^•pH 

.2 © 
m 52 

<D g 
-*-3 O 
c3 _d 


1 o3 


•p w-^ H ^ 

^■33 30 
^ § 2 - 2 *^ 


1 8h 

3 o 

® Vi 
N 

§ ELS' 

>30 

c3 ^ -*-p 
“3° 

3 33 . 

—-g ^3 

s«^i 

bc.S ® 
© c -H 1 »H 
.2 o3+h 
3 ^t3 
3 3 

o 3 o © ca 

h. 2 3 ^2 r-i 

a 3.2 © p 

K >H 3 (H o 
r 1 -u .0 .3 


W 

m 

c5 


W 


5? ea 

◄ g 

rh VP ' 

y o 


CO 

2 3 


>- 1 3 

« 2 "S ® 0 *h co 
.. 3 bcS ce 3 
m 3 3 co "H 

3 rr, —I <D 


O 

Eh 


H 

s 

H 


w 3 


«a 

3 c3 
43 CD 

g »2 

g Co 

C« 03 <D 

g 


O 

Eh 


03 


= 8 w>g 
OS .&.S •S 

































































Machine shop. 


ARMOR PLATE FOR UNITED STATES. 


151 


-4-5 

d 

c3 

r-H 

Ph 

fl 

O 

-4-5 

© 

o 

o 

o 

<N 


5 

o 

H 


8 888888 88888 8888888888888 



O CO 00 
tO ^ ^ 


8888 
CO CO CO 00 < 


HHHOOCO 


<N 


(h • 

il 

D 3 


o 

to 


CS <N C* CO ‘OHWNHH ^ CO to 


MWhhN^hOcOhWOOO 

r-t »—< to 


OrO 


oo 


c3 

-4-5 

o 

H 


i i 

i§ 


o 

to 





888888 88888 8888888888888 



8 8 

r>- (N 

•s *\ 

CO 


888 

^ to CO 

05 r-H 


^ o o © o o 

_NOOOiON 

COrHrHC^tOMfN^NH 


to to CO 


to CO CO 




CO ■ 


CO CQ cs 


CO 




H^o WHN-^HC^tO^ 


© 

© 

•H 

Q* 


d 

& 


-2 

03 

a 

•fH 

-4-5 

3 

o 

© 

© 

S 

o 

OG 


a 


00 

o 



88888 8888888888888 


to O O 1 
<N O to 
NtoOi 


to ^H ^ 

<N <N <N 


IS 


<M O (M CO 


to 


to 


to 


CO 05 


I CO 


CO 


o o o o o o 

P p 'p *d 


o 

*d 


m 


M 

© 

rC 

-4-5 

co 
© 

£ 

.a 

00 

▼-H 

rO 

-4^ 

© 

.© 


CO 
© 1 


tuc 

d d 

o o 


8 


d 

T) 

l-t 

© 


u 

o 

-4-5 

© 

© 

p* 

a 


o 

*d 


o 

T3 


o 

'd 


© 

© 
d 
c3 

d 

• (h 

v- o 
£«~ 
d° 

-M t-. 

© o 

C3 

VH o O 
d S'd 
d & 
c3 sq 
^ d 


© 

H 

3 

-4^> 

© 

,c3 


© 

© 

§ 

•§ 

O 


i-i 

O 


two 

d 

o 


© 

© 

»♦—» 

a 

tT 

c3 

© 

rd 

(H 

© 

-M 

© 

a 

c3 


,P -4-5 -4-5 
O © © 

- 

^_ *d 

n* >» >> ^i2 >d 

SrO Od o 

©©g.a 

-d **-• fe ^ 

c3 »o 

dcO-^-P 
rv © <D <o © 

>>&& g.g 
^ ^ Pi a 

©©-*-5 0 

d d O 

d d .P 


© 

& 

c3 

co 


CO ■ 


»*-» ■ - 
Or° 

CO O 

§1 
G 

5 o H 

Plg^ 4 * ^ 

O 3 co co ^ d . 

■ 4 " > *—j Jr? Jr! co c 3 < 

co ~p d >>£ > 

c3 3 je 2 ^2 § d 

£ ~ P< C3 +-> 

C3 £-< . •—* 

•—i © 'U 71; 

o 73^ ^ d 3 © cs >%.£ 

‘©Scd^^ddd^r-j 

' d'd c3‘2i.ti j§j§ © 

PQP*ggggo2P3 



© 

c3 

-«-> 

CO 

© 

© 

d 

•fH 

CO 


^©oooooooo 


c3 

s 


CO 

d 


CO 

© 



CO 

co' 

* . 

c3 /-s 
co^ 

^r2 

>h 

o © 

Pi 



C ©±3 SR* 

d -4-5 p • 

bjo© eg S'dx: © 

.g > 55 13 
’ —< ^ © 
d3 © > 

t . »rH d H 

i'H p © p c3 

-sS^Sa «£ 

>'d ^2 co o-~ 

" *3 £-9 Is 

<n Pi 


£<tx2i2 , d-d p 2 


ft 
© 

© 

© 

n ® 

^ c3 *^h 
• p tz CO © 

£ o^a 


CO « 




CO 


tx ^ 

« « S “-g^ 

03 H © © t^r- 


CO 

^ 5 © 

© ^ -^ r> 

■2|5|§ 


£:•§ 6c«“ “f 

3 ^ co" W 

■p d d'do o d 

§ 3o^i“ 

"•=.s.g»5f 


' ri 

d 

& 


c 

0- 


© .5 h P l, p o 

dp^ p r d ^©’P © © © Tfcs 

Ld O • C ri ^Olj C) ^ © Si ti 

■p jh o o tn.ad c.-tSPh ^«hb.h 

oeh^;<ihco^hPWWW<jj 


00 


CQ 


* Per cubic foot. 















































































Machine shop —Continued. 


152 


ARMOR PLATE FOR UNITED STATES. 



■a 

4-3 

o 

&H 




O^OQQOQ>0»00 CO 

WNOOOCOMNiO 0 05 


hOOOOOiO^h 




r-H rH <0 r-H 

H 


COTt'iOiO'THOOHiOCOOCOlO 
*0 CM r-H r-H r— 


ONrnCS 
r-H CM 
CM 


O 

o 


cr- 

o 

oo 


*rf< 


L_, • 

Ss 

as 


3 


CM O 
CO 


CM 


CM 


• • f 


• • • * • 


§ 


ft 

a 

o 

4H 

6 

o 

o 


P 


O 

H 


§8888883 8: 


:88888S888£8 

•CM OOCO <0000 O 00 r-H 


as CO o 
<y» co 


Tf 


L- »0 





O 

o 

CM 



JgOpQQip 


_• *0 O O O CM__ 

CD^iOiONhXhOCDO 


CM CM 


COOCM 

lO r-H 


o 

o 


05 

uo 


CM 

CM 


£h • 

<D 00 

a§ 


a 

& 


CM O 
CM 


CD 

O 


ft 


d 

& 


88 


88 

O r-H 




P 


P 

I 


co 

<D 


O 

p 

P 

1 

O 

CO 


<D 

o 

a 

05 

d 

d 

(H 

o 


*H 

o 


3 



i 

• 

• 

• 

• 

t 

• 

• 

« 

i 

• 

9 

t 

9 

• 

9 

• 

9 

9 

• 

9 

9 

• 

9 

9 

i 

9 

9 

9 

• 

• 

9 

9 

9 



t 

t 

• 

• 

t 

• 

• 

t 

f 

• 

9 

f 

f 

• 

9 

9 

9 

9 

t 

9 

9 

9 

9 

9 

a 

9 

9 

9 

9 

9 

9 

• 



• 

• 

t 

• 

• 

9 

• 

9 

9 

9 

9 

9 

9 

9 

o 

9 

9 

9 

9 



• 

• 

• 

• 

• 

• 

• 

• 

9 

9 

9 

9 

9 

9 

o 

9 

• 

9 

9 



• 

• 

• 

• 

• 

« 

• 

« 

t 

• 

• 

• 

• 

« 

• 

9 

• 

• 

• 

9 

1 

• 

9 

9 

9 

9 

9 

9 

>> 

9 

K 

9 

9 

1 

• 

9 

• 



• 

• 

• 

• 

• 

• 


• 

• 

9 

9 

9 

9 

9 

9 

ft 

9 

9 

9 

9 



• 

• 

• 

• 

• 

• 

• 

• 

9 

9 

• 

9 

9 

• 

d 

• 

9 

• 

• 



• 

• 

f 

• 

• 

• 

t 

« 

9 

1 

9 

9 

9 

9 

p 

9 

• 

9 

9 



• 

• 

« 

t 

f 

• 

• 

• 

f 

9 

9 

9 

9 

9 

£ 

9 

9 

9 

9 






t 



9 

• 

V 

9 

9 

9 

9 

9 


9 


9 

9 



1 

• 

• 

• 

• 

• 

• 

• 

« 

9 

1 

• 

9 

9 

P 

9 

• 

9 

9 



• 

t 

• 

• 

• 

« 

• 

1 

9 

9 

9 

9 

9 

• 

o 

9 

9 

9 

9 



t 

f 

t 

• 

« 

t 

9 

9 

9 

9 

• 

9 

9 

9 

p 

9 

9 

9 

9 



1 

t 

t 

• 

t 

• 

• 

• 

• 

• 

• 

9 

« 

• 

• 

9 

9 

9 

9 

9 

9 

9 

9 

9 

9 

9 

9 

(H 

• 

# 

• 

9 

9 

• 

• 

• 



• 

• 

• 

• 

t 

9 

t 

• 

9 

9 

9 

• 

9 

9 

d 

9 

9 

• 

9 



t 

• 

1 

• 

• 

• 

• 

• 

9 

9 

9 

9 

9 

9 

o 

9 

9 

9 

9 



• 

• 

• 

f 

• 

t 

9 

• 

t 

9 

9 

9 

9 

9 

•»H 

9 

9 

• 

9 



• 

• 

• 

• 

• 

1 • 

• 

• 

• 

• 

• 

• 

• 

t 

• 

9 

• 

9 

9 

9 

9 

9 

S 9 

9 

9 

9 

9 

ti P' 
2 p 

9 

9 

9 

9 

• 

9 

9 

9 



88888 


8 

CM 


iO • 

ay 1 _ _ 

cO^»OiCN 


CM CM 


oooooooooooo 
2d ddddddddddd 
co 


O O 
d d 


O 

d 


a 

<D 


d 

P 

d 

a 


d 

o 

O 


CO 

d 

CD 

a 

ft 

d 

o< 

<D 

d 

d 

o3 


o 


<D 


CO 


w,2 


P~ 

CO ft 


CO 

p 

d 


ft 
o 
05 

a 

av. 


CO 

d 

S? 05 

<D 4-3 

d d 
,2 d 


CO 


ft 

P 


coft 

Sh <D 
P ■£> 

CO 3 0 
b£) P CO 

■§e-5 


w 

CO 

d 

o 

ED 


CDft 
o p 
P 

a CO CO 

r-j 

. Bddoo 

O 1 -rH tUD d ft J-H 

^-rftH § 

c/T <2 ft 

d d -p 


C3 

a 


3 


P 

a 

P 

CO 


tuO 

.a 

8 

CO 


r^ 

(-1 

o 

& 


ft 

CO *h 

<D 


w P 


<d £ 

bx!> 

3d 

Eg 

P 


CD 
O • 


Bi?ooooocoooo 
tn-ftdddddddddd 

•sa 


t 

d, 

CO 


& 


® g.a 

ft d§ 
dft ft 


feX 

®ts 

a o 

| - 


w «d « 

P P co 

*H ® 

o ft 
^ >> 
<D +-> 

CO ,_, 

CO £—\ r I 

^ m g 

^ o ft r d 

5fd 2d 
d -g d *a 

in 

o 

ft|Ts ofi 

co ^ -M 


CO ^ -4—> 

dgd^ 

*H ^ Qj m 


►H P *-—« 

S D n) 

o S 

n _ rH 


b£) o ft 
d p ^ 


^ft 


CD 

Ch 


?s a 


(h 

o 


-M 

o 


<D 

ft 


a 


CO CO 


•H -H 

aa 


•p CO 

V—I I—* 

2-S o 

■§3 = 3 
3 §i.g 0 ~ 

® H -4 if M'S 

p CO co H PH 

.H O (Jj 3 oj s 
^HOOhIm 

C5 


ft 2 

pHft 
03 4H 


tH 

c 


co 
ft 

CO o 
CD ^3 

ft co 

2 ■* 

d £2 

CD ij 

^ c 


d 

t^’u : d „ 

p o d^ 03 co 

R ^ 05 4H fcjc CD 

1 2 4-t"S R 'S r cd 

2 CC3 .CO ft ft fH ^ ft 

oft > >H ^ Q) -P rs CO 
br T O W H 0 W a) 

= V+” > '-H 0 t> H P H 

CO ti^'S P'S 

ft d ft+-i d ft 

oQttSEHOE-'tf o 


CO 


i.~, c5 j'ft 

s ^ 

3‘s&a 

® ® h a 

s-i-g I.. s 

rS5 P t- P O 

ft CO CO O d © 

a O Oft 

£sao^§ 

^ d .C3 O-p 
co A 


p 

ft 


p p 


a 


CD 

s-s 

^ ft 


D 

.a 

ft 

p 

a 

.3 

d 

.3 

*- 


c3 P“ co p 
2 <D ex . CD ft 

2 d co o 

a a cs g § 

PJ tXCD 

r—I t> 1 - 1 . 

ft o ft d 5 

ri o d »h^ 

SHaQ? 


CO 


CD 

O 


R .. 

d 4-» 

' p 


^ 3 ^ TO O 

CO ft CO k O h 
n; p—i O/ h 

Sa^as-f 

OS 


O 

o 


•s 

d 


c 

o 

Eh 


o 

CO 


ft^ 

27ft 


o 

■H 

<D 


tx 

d 


CO 

§ 


4 H O 

d <D 
D . 
d co 

>-H Q5 

.&«• 

g o 

CT' 0 

(D D 

_ -*p ' 
d o 
d+-> 
03 w 
-2 d 
2 

o p 
■*P -*-5 . 
CO 


p 

d 


o 

> 


CO 

d 


o 

d 


CO 


p 

a 

CO 


o 
O 
■+— 1 


o 

o 

4-3 


o 

o 


lO 

CM 


CO 

o 

O 


i« 

>4d 
>^p 
^ w 

g>H 


bX O 

.3d 

ft 


p 


rn O 

J2 »H 
p 3 




CO co 

P CD 


a 


c 

CD 

d 


o 

p 

ft 

p 

o 


CO 

Sr co g 

<D O 


s ft 


H 0) u X 

S-s-afi 

o>S<i 


<D 

> 

O 

ft <D 

o o 

•rH 4-3 

d p ts 
r2 ^ P *" 
rti'-po" 

►Soi WgO 


d 

o 

H-3 


d 

o 


(h 

D 

ft 




d 

p 

p 

tH 

O 

ft 


8 


d 

p 

o 


u, 

P 

ft 


P 


O 

Eh 


8 


Ch 

P 

P 

fcN 


tH 

P 

ft 

m 


O 

o 


a 


p 

o 

p 


ft 

p 


PS 


w 

H 

O 

!? 




o 

<2 


o 


ft 

d 

o 


tH 

P 

ft 


































































































































ARMOR PLATE FOR UNITED STATES. 


153 




« 























* 



























































- 















* 























1 111 I 

I 'lM 8 II 















































































































































































































































































































































































































































































. 

































r 


































































































. 

. 


■ 











: 






























































































* 










































































































































Mi l , 









9 ■ 
















































































